Some salespeople in California receive compensation for their work and/or services only on a commission basis. In this system, when an employee sells something, he receives a commission or payment. This sum is calculated by the quantity of goods sold by the employee or the cost of each good sold. Please take note that only sales staff are eligible for this pay structure.
While companies might have many different systems in place to pay out commission, California law is clear about several factors of that payment. Continue reading to learn more about commission pay. If you believe you have not received commission legally, contact PLBH at (800) 435-7542 to speak to an employment law attorney.
Commission must be paid twice a month
California law generally mandates that commissions be paid at least twice every month. Aside from that, workers typically have the right to unpaid commissions upon cessation of employment. Employers can choose to pay more often, such as weekly, but they must pay at least twice every month.
Commission is often one of several types of payments a worker receives
One option to various forms of employee pay is to work on commission. Other ways to get paid include getting the minimum wage per hour, getting a salary, getting paid through a combination of hours and salary, or having a regular rate of income.
The importance of a commission agreement
The details of a commission-only pay arrangement are outlined in the commission agreement, a legal instrument. In most cases, the agreement is a clause in an employee’s employment contract. Both the employer and the employee agree to the specifics of commissions and working conditions in the agreement.
These specifics could include how commissions are determined, when they are earned, the employee’s primary responsibility in terms of selling, whether a commission is paid after a task is completed, and/or whether the employee is required to conduct sales at the employer’s place of business, a specific service establishment, or some other location.
Understanding earned sales commission
According to California State Law, companies are required to pay sales commissions to employees once they have been earned. The conditions and specifics of how and when a commission is received are often outlined in the commission agreement.
A contract might specify, for instance, that a commission is earned when a customer meets certain requirements, such as signing a sales contract and paying for the product or service. Bear in mind, however, that once the requirements are completed, the law states that the company must compensate the employee, just as it would with wages.
Do you have questions about your commission pay?
If you believe you have not been paid everything you are owed, we welcome your call to PLBH at (800) 435-7542 for a case evaluation.