©2025 Seyfarth Shaw LLP www.seyfarth.com 2025 Cal-Peculiarities | 319 388 Sprewell v. Fed. Express Corp., 2021 WL 6103057, at *4 (C.D. Cal. Sept. 30, 2021) (dismissing reimbursement claim for some but not all PPE items; “[T]o the extent that Defendant reads Hess to stand for the proposition that a business expense is not reimbursable as a matter of law if it is ‘generally usable’ outside the workplace, the Court declines to adopt such a far-reaching conclusion. Nearly all business expenses have potential utility outside the workplace – protective eyewear that a construction worker must wear on the job site could also be worn during projects around the house; a laptop that a traveling salesperson must use could also be used for personal purposes. … Without a clear statement from the California legislature or its state courts, the Court concludes that such a narrow construction of § 2802 is not warranted.”). 389 AB 2588, 2020 bill adding Lab. Code § 2802.1. 390 Krug v. Bd. of Trustees of Cal. State Univ., 94 Cal. App. 5th 1158, 1167–68 (2023). 391 S. Cal. Pizza Co., LLC v. Certain Underwriters at Lloyd’s London, 40 Cal. App. 5th 140 (2019). 392 Lab. Code § 226.2. 393 Id. (first paragraph). 394 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). 395 Id. at 1014. 396 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.”). 397 See generally Muldrow v. Surrex Sols. Corp., 208 Cal. App. 4th 1381, 1394, 1396 (2012). 398 DLSE Enforcement Policies and Interpretations Manual § 2.5.4 (2002). 399 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). 400 Lab. Code § 204.1. 401 Areso, 195 Cal. App. 4th at 1008. 402 Muldrow, 208 Cal. App. 4th at 1392, 1396. 403 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). 404 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. 405 Sciborski v. Pac. Bell Directory, 205 Cal. App. 4th 1152, 1171 (2012). 406 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.”). 407 DLSE Opinion Letter 2002.06.13, at 2 (permissible to recover from future commissions advances for sales not completed). See also De Leon, 207 Cal. App. 4th 800 (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). 408 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). 409 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). 410 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.”). 411 Hudgins, 34 Cal. App. 4th at 1122 (emphasis in original). 412 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.”). 413 Lab. Code § 2751(a). 414 Lab. Code § 2751(b). 415 Lab. Code § 2751(c) (“commissions” for purposes of Labor Code section 2731 has the meaning set forth in Labor Code section 204.1).
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