What are the rules for paying commissions to employees?

In California, employers must comply with wage and hour laws regarding the payment of commissions to employees. Commission payments are salary, wages, or other forms of compensation paid to employees based on a percentage of sales or services they provide. Commission may be paid in a variety of ways, which are determined by the employer. To ensure that commission payments are legal, employers should make sure that employees are informed in writing of the terms of employment, including the rate of commission and any other conditions of payment. Commission payments must be made at least twice per month and be received by the employee no later than the 15th day of the following month. All commissions must be paid in full at least monthly and all earned money must be paid to the employee, even if the employee is terminated. Any accrued commissions that are unpaid at the time of termination must be paid in the next regular payroll. Employers may not make any deductions from commission payments unless there is an agreement in writing signed by the employee and the employer agrees to the deductions. Additionally, commission payments are subject to the same withholding taxes as regular wages. Finally, an employer cannot require an employee to purchase or lease products or services in order to receive a commission. These and other rules are designed to ensure that workers receive a fair and legal compensation for their services.

Related FAQs

What are the restrictions on employee drug testing?
What is considered an exempt employee?
Are employers allowed to require employees to work additional hours without pay?
What are the rules for tip-pooling?
What is the minimum wage in my state?
What is the difference between a collective bargaining agreement and a wage and hour law?
What is the difference between wages and benefits?
What is the difference between a minimum wage and a prevailing wage?
What is the impact of minimum wage increases on businesses?
What are the implications of not complying with wage and hour laws?

What are the rules for paying commissions to employees?

Related FAQs

Related Blog Posts