Can California Employers Withhold Earned Bonuses And Commissions?

Can Unpaid Commissions And Bonuses Be Grounds For A California Employment Claim?

Many businesses use commissions and bonuses to encourage their employees to perform at their best. Performance-based bonuses are a standard tool for those in sales and management jobs. In addition, when employees achieve specified objectives, the corporation may agree to provide them with additional income.

Qualifying for a bonus can be an incredible drive to give your job your all, whether you need to sell a certain number of units in a given week or have to satisfy specific corporate requirements for sales when compared to staffing hours. Bonuses and commissions are even factored into some employees' monthly budgets.

What happens if your boss fails to deliver on their promise of a commission or bonus?

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What Are Commissions In California Employment Law?

Commissions are earnings (a type of compensation) paid to "any person for services rendered in the sale of such employer's property or services and based proportionately on the value," according to California's Section 204.1.

This law is expanded upon in Section 2751. The following are not defined as commissions:

  • When retail staff receive short-term bonuses

  • Payments made due to temporary incentive payments that raise the amount paid under a stated contract

  • Bonuses and profit-sharing schemes (unless an employer offers to "pay a defined percentage of sales or profits" as a form of compensation)

Consider consulting a Los Angeles employment lawyer for more clarity on the legal side of things. Your commission dispute will depend on various factors, so getting legal advice might be the best way to get specific answers.