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socrateaser
socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 39160
Experience:  Retired (mostly)
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Resigning from a "commision only" job

Customer Question

Im a "commission only" worker in California. The Job sucks. Im going to quit. Too much funny business. My sales pipeline is full. My commisions are current and projected. Meaning I have Installations that have been completed and will be completed at a future date. What are the guidelines? How much time do they have to pay me? Am I entitled to all of my future earnings? Are commision only workers entitled to California State paid rest periods? What Labor codes can I quote in my letter of resignation what are the penalties if they don't abide?
Submitted: 6 years ago.
Category: California Employment Law
Expert:  socrateaser replied 6 years ago.
Hi,

California law holds that if you would have been entitled to your commission without doing anything further, had you remained employed, then you are entitled to that commission after you quit -- unless a written sales commission agreement between you and the employer states that you're not entitled. And, even in that case, you have a legal action to try to have a court hold that the commission cancelation clause is "unconscionable" -- which means so unfair that it's effectively a forfeiture -- which, of course, that's exactly what it is.

See, Schachter v. Citigroup, Inc., supra, 47 C4th at 621, 101 CR3d at 11–12]; Nein v. HostPro, Inc. (2009) 174 CA4th 833, 850, 95 CR3d 34, 49; Ellis v. McKinnon Broadcasting Co. (1993) 18 CA4th 1796, 1805–1806, 23 CR2d 80, 85.

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!


Customer: replied 6 years ago.
How much time do they have to pay me? Am I entitled to all of my future earnings? Are commision only workers entitled to California State paid rest periods? What Labor codes can I quote in my letter of resignation what are the penalties if they don't abide?
Expert:  socrateaser replied 6 years ago.
How much time do they have to pay me?

A: Presumably, all of the commissions earned for sales where there remains nothing further to do in order to bind the purchaser to the sales contract. Example: If you sell a one- year subscription to a magazine, and your deal is that you are paid 2% of the gross magazine price each month of the contract, then if the purchaser accepts that deal, you are entitled to be paid for all 12 months, because ther is nothing remaining left to do under the agreement. Conversely, if the contract states that a customer cancelation under certain circumstances, terminates the customer's obligation to pay, and the customer does so, then so would your commission right terminate.

As you can see, there are an infinite number of possibilities here, and there's no way to know your exact outcome, without reading your sales commission agreement, and the customer agreements that you have sold under.

Am I entitled to all of my future earnings?

A: Impossible to determine without reviewing your sales contract and the customer contracts.

Are commision only workers entitled to California State paid rest periods?

A: A commission salesperson in the merchantile industry (sales of goods: e.g., anything you could buy at Sears), is entitled to a 30 minute meal break after 5 hours of work, and 10 minutes rest for each 4 hours of work. IWC Order 7-2001-7(11)-(12). If you are entirely "outside sales," and in control of managing your workday, then this rule doesn't apply.

What Labor codes can I quote in my letter of resignation what are the penalties if they don't abide?

A: In my first answer, and in this one, I have cited all of the applicable law. However, there is little point in quoting the Labor Code or listing penalties, etc. You're not a lawyer, and your reader won't expect you to know what you're talking about -- nor will the boss bother to review your legal cites. I've never met an employer that gave a rat about what any employee thinks about anything, until there's a summons and complaint sitting on the boss' desk.

The better move may be to file your wage claim with the DLSE before you quit, keep working, and then let the employer start retaliating against you -- at which point, you can file a second retaliation claim with DLSE, and that may increase your damages against the employer.

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!


Customer: replied 6 years ago.
IF I QUIT TODAY. what are the legal requirements to pay me my last check Including that of future earnings ?
Expert:  socrateaser replied 6 years ago.
Labor Code 202(a) requires that an employee who resigns must be paid all wages owed within 72 hours of the time of resignation.

The employer must make good faith efforts to calculate your earnings due and pay them within 72 hours. See On-Line Power, Inc. v. Mazur, 149 Cal. App. 4th 1079, 57 Cal. Rptr. 3d 698 Cal. App. 2d Dist. 2007).

Hope this helps.


And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!