What Is Not Considered A Commission?

Not all forms of pay are considered wage commissions. A wage commission typically refers to a compensation plan based on the sale of a product or service, where the employee earns a percentage of the sales they generate. Here are some forms of pay that are generally not considered wage commissions under California law:

  • Bonuses: Performance bonuses, discretionary bonuses, and other types of bonuses that are not directly tied to the sale of products or services are not considered commissions. They are often given as rewards or incentives at the employer’s discretion.
  • Salary and hourly wages: Regular salary and hourly wages paid to employees for their time worked are not considered commissions. Commissions are typically a form of incentive pay based on sales or other measurable criteria.
  • Overtime pay: Additional pay for hours worked beyond the standard workweek is not considered a commission.
  • Tips and gratuities: Tips given to workers, particularly in the service industry, are not considered commissions.
  • Piece rates: Compensation based on the number of units produced or tasks completed, not linked to sales, does not qualify as commission.
  • Per diem or daily stipends: Payments made for work expenses or travel costs are not considered commissions. These are reimbursements or allowances for specific costs incurred by employees.

If you are unsure about how your pay is categorized, it’s best to consult with an employment lawyer. Understanding the distinctions between commissions and other types of wages is crucial for both employers and employees to ensure compliance with California wage laws.

Employers sometimes try to take advantage of workers who are unaware of their rights regarding the payment of commissions. The skilled San Francisco employment lawyers at McCormack Law Firm can help you recover your unpaid wage commissions. Contact us today for a free consultation.

Other Unpaid Wage, Overtime and Commissions FAQ:

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