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Marsha411JD
Marsha411JD, Attorney
Category: California Employment Law
Satisfied Customers: 20227
Experience:  Licensed Atty, 29 yrs exp in the practice of law.
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Can a business that pays commission only to independent contractors

Customer Question

can a business that pays commission only to independent contractors require them to report 30 minutes ahead of work shift unpaid
Submitted: 2 years ago.
Category: California Employment Law
Expert:  Marsha411JD replied 2 years ago.
Hello,Thank you for your question. Just for clarification, is this situation taking place in Texas or California?
Customer: replied 2 years ago.
Texas
Customer: replied 2 years ago.
I am being asked to sign a contract as an IC that requires arrival 30 minutes prior to shift (shifts are 9-2:30 or 2:30 to 8 and I am already nervous about this much loss of flexibility; we are only allowed to choose morning or afternoon, not actual times) and if you do not arrive that 30 minutes prior you will be marked as tardy and receive warnings and then dismissal if it continues. There is no compensation for the 30 minutes wait time or payment beyond a 50% cut actual massage sessions performed and commissions are paid 15th and 30th each month. The spa takes a cut of half the cost of each session as well as everything above a $25 gratuity for "room rental". Hope this clarifies.
Expert:  Marsha411JD replied 2 years ago.
Hello again and thank you for that clarification. Your question somehow had ended up in the California Employment law category. In any event, if the worker is correctly categorized as an independent contractor, then the employer is limited on the amount of control that they can assert over the worker. It has less to do with how the worker is paid and more to do with IRS and State law rules about who can be categorized as an IC versus a W-2 employee. This is a very complex and fact specific area of the law and only the IRS and the TWC could ultimately decide that issue.If the worker in this situation were a W-2 employee, they could be forced to report to work without extra pay, even if they were paid only on a commission basis, as long as their rate of pay for the pay period, after the commissions are paid is equal to or larger than minimum wage based on the number of hours put in. If the employee's wages were below minimum wage, the employer would have to make up the difference. In the case of a true IC, whether the employer can require them to come in early and not pay anything extra depends entirely on what the IC agreement/contract says. In other words, with an IC (again assuming they are correctly categorized) the agreement, and not some statute controls the payment issues. So, in this case, if there is no mention of working hour requirements in the agreement or it is clear that the commissions only cover the actual work within a specific period of time, then there might be room for the IC to refuse to come in early. If you are unclear as to whether or not the position is correctly categorized as an IC, you, or the employer can request an opinion from the TWC and/or the IRS on an SS-8 form. Please let me know if you need any clarification. Keep in mind that any post you make while I am working on a previous post of yours will not get to be until after I respond to the original one. I do not engage in the Chat function.
Customer: replied 2 years ago.
thank you. while I was waiting I was able to reach the Department of Labor in the Dallas branch office and they confirmed it is not lawful to require any worker to regularly report to work without pay a half hour before work actually is scheduledI was aware of the SS-8 option but I really don't have six weeks or more to wait around for the IRS to make a determination.
Expert:  Marsha411JD replied 2 years ago.
You're welcome. Although I can't comment on what the DOL said, I can say that as long as a W-2 employee is being paid at least minimum wage for the hours they work, when commissions are averaged out, the employer would not have to pay extra for report time. The key is whether minimum wage is met. Otherwise, they would have to pay for time worked if the employee was paid hourly. A bit convoluted, but both Federal and Texas law. Of course, the IC issue complicates things and the TWC and DOL will not get involved in true IC cases other than to make the determination if the worker is or isn't.
Expert:  Marsha411JD replied 2 years ago.
Hello again,
I wanted to touch base with you and make sure that you did not have any follow up questions for me from the answer I provided to you on the 10th. For some unknown reason, the Experts are not always getting replies or ratings (in the pop up box for this question, which is how we get credit (paid) for our work) that the customer thinks have gone through. If you are having technical difficulties with reading, replying or rating, please let me know so that I can inform the Site administrator.
In any event, it was a pleasure assisting you and I would be glad to attempt to assist you further on this issue, or a new legal issue, if needed. You can bookmark my page at: http://www.justanswer.com/law/expert-marsha411jd/
Thank you.

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