312 | 2024 Cal-Peculiarities ©2024 Seyfarth Shaw LLP www.seyfarth.com 381 S. Cal. Pizza Co., LLC v. Certain Underwriters at Lloyd’s London, 40 Cal. App. 5th 140 (2019). 382 Lab. Code § 226.2. 383 Lab. Code § 226.2 (first paragraph). 384 This relatively new statute has survived a constitutional challenge. Nisei Farmers League v. Cal. Labor & Workforce Dev. Agency, 30 Cal. App. 5th 997 (2019) (section 226.2 is not facially unconstitutional as the language of the statute is sufficiently clear to provide adequate notice of the conduct the statute prohibits or requires). 385 Id. at 1014. 386 Vaquero v. Stoneledge Furniture, LLC, 9 Cal. App. 5th 98, 110 (2017) (“We agree with Bluford that Wage Order No. 7 requires employers to separately compensate employees for rest periods if an employer’s compensation plan does not already include a minimum hourly wage for such time. … All of the federal courts that have considered this issue of California law have reached a similar conclusion and have held employers must separately compensate employees paid by the piece for nonproductive work hours.”). 387 See generally Muldrow v. Surrex Sols. Corp., 208 Cal. App. 4th 1381, 1394, 1396 (2012). 388 DLSE Enforcement Policies and Interpretations Manual § 2.5.4 (2002). 389 Areso v. CarMax, Inc., 195 Cal. App. 4th 996, 1009 (2011) (paying salespersons a uniform payment per product sold irrespective of sales price qualifies as commission, because commissioned wages can be based proportionately on the amount or value sold). 390 Lab. Code § 204.1. 391 195 Cal. App. 4th at 1008. 392 Muldrow v. Surrex Sols. Corp., 208 Cal. App. 4th 1381, 1392, 1396 (2012). 393 DLSE Opinion Letter 2003.04.30 (noting that sometimes commissions payments can be considered not yet earned where the customer’s payment may be required to complete a sale and where post-sale servicing may be part of salesperson’s duty to earn the commission). 394 DLSE Opinion Letter 2002.12.09-2, at 2. See also Peabody v. Time Warner Cable, Inc., 59 Cal. 4th 662, 668 (2014) (commissions are owed only when they have been earned, even if it is on a monthly, quarterly, or less frequent basis). Under section 204, earned commissions must be paid at least as frequently as semi-monthly. 395 Sciborski v. Pac. Bell Directory, 205 Cal. App. 4th 1152, 1171 (2012). 396 DeLeon v. Verizon Wireless, LLC, 207 Cal. App. 4th 800, 803 (2012) (“Verizon Wireless may legally advance commission payments to its retail sales representatives before completion of all conditions for payment, and charge back any excess advance over commissions earned against future advances should the conditions not be satisfied.”). 397 DLSE Opinion Letter 2002.06.13, at 2 (permissible to recover from future commissions advances for sales not completed). See also De Leon v. Verizon Wireless, LLC, 207 Cal. App. 4th 800 (2012) (upholding employer policy of advancing commissions that were earned only when customer did not discontinue cell phone service during applicable chargeback period of up to one year); Steinhebel v. Los Angeles Times, 126 Cal. App. 4th 696 (2005) (upholding employer policy of advancing commissions to subscription salespeople and charging advance back if subscriber cancels within 28 days). 398 Koehl v. Verio, 142 Cal. App. 4th 1313 (2006) (upholding compensation plan whereby employer could recover unearned commissions if certain conditions were not met, where recovery was authorized in writing by employee and did reduce standard base pay; Labor Code section 224 creates a broad exception to anti-chargeback rule stated in Labor Code section 221). 399 Hudgins v. Neiman Marcus Grp., Inc., 34 Cal. App. 4th 1109, 1112 (1995) (commission plan that accounted for returns of merchandise originally sold was not enforceable to extent that plan prorated “unidentified returns” that could not be attributed to individual sales persons). 400 Id. at 1123. See also Aguilar v. Zep, 2014 WL 4245988, at *16 (N.D. Cal. Aug. 27, 2014) (“Even if a contract exists ..., an employer cannot shift the cost of doing business to an employee ... . [Where] routine business expenses that shift the cost of doing business to the employee [are deducted from the employees’ commission-based compensation,] ... [t]he fact that the [employees] consented to the practice is irrelevant.”). 401 Hudgins, 34 Cal. App. 4th at 1122 (emphasis in original). 402 See DLSE Opinion Letter 1999.01.09, at 2 n.2. See also Marr v. Bank of Am., NA, 506 Fed. Appx. 661 (9th Cir. 2013) (“Deductions from ... commissions are permitted ... when (1) the deductions are tied to the employee’s sales rather than general business expenses, and (2) the employee agrees to the deductions by contract.”). 403 Lab. Code § 2751(a). 404 Lab. Code § 2751(b). 405 Lab. Code § 2751(c) (“commissions” for purposes of Labor Code section 2731 has the meaning set forth in Labor Code section 204.1). 406 Neisendorf v. Levi Strauss & Co., 143 Cal. App. 4th 509 (2006) upheld the denial of a bonus on the ground that the bonus plan expressly restricted payments to those persons employed by the company on the payout date, thus permitting the employer to avoid paying employees dismissed for cause between the end of the period in which the bonus was earned and the payout date, but the court left open the question whether the employer could deny an earned bonus to an employee who was absent by the payout date through no fault of the employee). 407 Lucian v. All States Trucking Co., 116 Cal. App. 3d 972, 976 (1981) (“an employee who voluntarily leaves his employment before the bonus calculation date is not entitled to receive it”).
RkJQdWJsaXNoZXIy OTkwMTQ4