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CA: Commission-Only employee required in office 40hrs/week?

Commission Only Employees In CaliforniaHello and thank you in advance for helping me! I am a commission-only sales person working in California. I am required to work out of the office 40 hours per week unless I am meeting with a client. Is that requirement legal since I am comission-only and am not earning any wages from my Employer? The only benefit I have from my Employer is my insurance benefits. I work more productively in my home office & my Employer doesn't understand this policy is counter-productive since I am easily distracted by a loud office & my colleagues when I am n the office.

Answers

Topic Expert
Edward Abbati
Title: Vice President of Finance
Company: Location Labs
LinkedIn Profile
(Vice President of Finance, Location Labs) |

Commission-only in CA is illegal. An employer is required to pay at-least a minimum wage. I am not expert but contact the CA Labor Agency http://www.labor.ca.gov/laborlawreg.htm

Ted Monohon
Title: VP -Finance / Controller
Company: Fantex
(VP -Finance / Controller, Fantex) |

Commission only employees in CA are not illegal. What is illegal is not paying them minimum wage and in certain cases not paying overtime unless they are exempt employees. If your employer is paying you commission and providing benefits, then the requirement for 40 hours in the office is not illegal (you are an at will employee). If you are an independent contractor (collecting your commission directly from the customer), requiring a 40 hours work week in the office would probably push you to employee status and raise other employment law and payroll issues.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

@Ted:

Because you seem to be well versed in CA employment laws, I'd like to hear your take on this:

We are a CA public agency; a JPA. Our outside legal "advisor" has insisted on more than one occasion involving termination that, we are NOT an at will employer due to the fact that we have a progressive discipline policy. He says that negates any presumption of "at will" employment. He has invoked this argument when we were preparing to terminate an employee we caught stealing merchandise.

I came from the private sector and I think he's quite wrong; that the basic assumption in CA is "at will" unless otherwise stated such as positions governed by a union contract. But, I'm in no position to debate him.

I see his insistence as self serving when I am signing the $220/hr checks over to him for these cases where he demands that we involve him because we aren't an at will employer and need his services to protect us.

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

Here's an excerpt from a recent (1/1/14) posting on SHRM that explains the California provisions for Commissioned Salespersons Exemption.

A California employee qualifies for the commissioned salesperson exemption if the employee:

Is primarily engaged in sales.
Has earnings exceeding 1.5 times the California minimum wage.
Has more than 50 percent of his or her earnings representing commissions.
Is covered by Wage Orders 4 or 7.
Spends more than 50 percent of working time away from the employer’s place of business.

click this link to read the full posting. http://www.shrm.org/TemplatesTools/hrqa/Pages/Californiaexemptionrequirements.aspx

Hope this helps.

Ted Monohon
Title: VP -Finance / Controller
Company: Fantex
(VP -Finance / Controller, Fantex) |

I have seen where a progressive discipline policy CAN cause a change in at will employment. In almost every case though I have seen exception language properly included in the policy to allow for immediate termination.

Make sure your policy includes a statement that you have the right to use any level of discipline, up to and including termination. Make it clear that progressive discipline will not always be used; don't, however, limit the situations in which you may bypass progressive discipline. Consistent application is the key to avoiding lawsuits.

This "consultant" should be recommending these changes in your policies if they aren't already in them. If not, you should find a new one.

And remember, any employee can sue for discrimination when terminated - it is whether they are going to win the lawsuit and how much you want to fight it. Just have your documentation in order and you should be fine. If you are worried, the Cal Chamber of Commerce (for a small fee) can let you consult with their HR attorneys and specialists on a specific item.

good luck!

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