When an employee takes a job, the employee agrees to work for an employer in exchange for compensation, such as an hourly wage or salary. When a company promises a certain type and amount of compensation, it is required to pay the employee the compensation it has promised. In addition, laws like the California Labor Code and the federal Fair Labor Standards Act (FLSA) impose certain requirements on employers regarding employee compensation.
Employees have the right to be paid in accordance with the law:
Non-payment of wages is not just the act of withholding an employee’s pay. Making an employee work while not clocked in, requiring employees to work through their breaks, and making illegal wage deductions are all illegal means to avoid paying employees.
Non-payment of Commissions
Just like stated wages, employees must be paid the commissions they earn according to their employment agreements. A commission is a percentage of the earnings an employee brings in for the company. For salespeople and certain other employees, commissions may make up a significant portion of the employee’s compensation, sometimes as much as 100% of their income.
Under California law, the terms of a commission plan must be set forth in writing. It is illegal to terminate an employee in an attempt to avoid paying him or her earned commissions. An employer is not allowed to retaliate against an employee for complaining about unpaid commissions. This includes termination, demotion, or discipline of any kind.
Non-payment of Bonuses
Employees must also be paid any non-discretionary bonuses that they earn. When an employment agreement states that an employee will earn a bonus for meeting certain criteria, the employee must be paid that bonus if and when he or she meets the necessary requirements. This is known as a non-discretionary bonus. However, many bonuses are discretionary, meaning the employer reserves the right to decide whether or not to pay the bonus. A discretionary bonus is essentially a gift to the employee, which the employee is not entitled to receive and thus cannot compel the employer to pay the designation of a bonus as “earned” or “discretionary” is sometimes a matter of dispute.
If you work, you deserve to be paid. If you earned bonuses, tips, or commissions, you have the right to receive that compensation. To find out how we can help, contact our team of experienced employment lawyers at Minnis & Smallets LLP by calling 415-551-0885 or submitting the online contact form.