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commision only employees being charged a gas surcharge California

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  • commision only employees being charged a gas surcharge California

    My boss stated today that all salesmen/technicians are to pay a gas surcharge for using the company vehicle that was given to us as part of our salaries upon hire (trucks are to be driven home and end of day, and gas is paid for by the company).
    He did not charge the salaried employees nor the hourly omployees, just the commissioned employees. I feel hes doing this to hide the deduction from the labor board if anyone one of us file a complaint.
    Question is, is this practice legal?
    He also takes deductions from payroll if a salesman makes a miscalculation on orders, essentially back flagging our payroll to cover the difference.

    any help would be appreciated.

  • #2
    This is complicated. I am going to take you at your word that you are legally an employee who can be paid on a 100% commission basis, although I am also going to say that most employees cannot. However that was not your question. If it turns out that you cannot legally be paid on a 100% commission basis, then you can discard my entire answer.

    The rules for commission only are complicated. The very short overly simplified answer is that the employers can (probably) deduct any actual cost related to the sale. Of course there are a bunch of exceptions and fine print. I am going to include a pointer to the CA-DLSE manual. There is a full chapter on commissions and I am going to strongly suggest that you download the manual and read the entire chapter.
    CA-DLSE manual

    More complications.
    - Your private use of the company's vehicle may or may not be legally taxable wages to you under the IRC (Internal Revenue Code). Your employer may or may not want to argue that the deduction is simply the recovery of personal usage of company vehicle. Without going through all vehicle rules, basically a large heavy specialized utility truck (for example) would not be subject to personal use, while a general purpose pick-up truck probably would be.
    - CA in one of the very few states which requires employees to reimburse business expense. This may or may not effect your issue.
    - CA also has some very tough deduction rules.
    CA deduction rules
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)


    • #3

      It is legal for a salesperson or a technician of an auto to be paid straight commission. And yes they can deduct for personal gas. The exception would be to the extent that the deduction cannot bring you below minimum wage in any given pay period.


      • #4
        Originally posted by txlp View Post
        It is legal for a salesperson or a technician of an auto to be paid straight commission.
        Not quite true.

        They must be paid at least minimum wage for all hours worked and can be exempt from overtime.

        Straight commission is just that. You get paid based upon sales or some other formula and you could make zero for months on end, legally.
        Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.


        • #5
          The point was they are exempt from overime, certainly not advocating that they could potentiall make zero. My last sentence indicates that deductions could not bring them below min wage.


          • #6
            Yo, TXLP, Welcome to the Insanity!
            I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


            • #7
              Deductions from pay

              For California:


              An employer can lawfully withhold amounts from an employee’s wages only when: (1) required or empowered to do so by state or federal law; (2) when a deduction is expressly authorized in writing by the employee to cover insurance premiums, benefit plan contributions or other deductions not amounting to a rebate on the employee’s wages; or (3) when a deduction to cover health, welfare or pension contributions is expressly authorized by a wage or collective bargaining agreement. (Labor Code §§ 221, 224) Although a wage garnishment is a lawful deduction from wages under Labor Code § 224, an employer cannot discharge an employee because a garnishment of wages has been threatened or if the employee’s wages have been subjected to garnishment for the payment of one judgment. (Labor Code § 2929(a))

              The ability of employers to deduct amounts from an employee’s wages due to cash shortage, breakage, or loss of equipment is specifically regulated by the Industrial Welfare Commission Orders and limited by court decisions (Kerr’s Catering v. Department of Industrial Relations (1962) 56 Cal.2d 319). In addition, there have been several court decisions that significantly restrict an employer’s ability to take an offset against an employee’s wages. (See Barnhill v. Sanders (1981) 125 Cal.App.3d 1 Balloon payment on separation of employment to repay employee’s debt to employer is an unlawful deduction even where the employee authorized such payment in writing); CSEA v. State of California (1988) 198 Cal.App.3d 374 (Unlawful to deduct from current payroll for past salary advances that were in error); Hudgins v. Nieman Marcus (1995) 34 Cal.App.4<sup>th 1109 (Deductions for unidentified returns from commission sales unlawful.)

              There could also be a potential Catch 22 if the employer requires you to drive the vehicle home with:

              Expenses: An employee is entitled to be reimbursed by his or her employer for expenses or losses incurred in direct consequence of the discharge of the employee’s work duties. (Labor Code § 2802)


              • #8
                Thanks Patty

                Originally posted by Pattymd View Post
                Yo, TXLP, Welcome to the Insanity!
                I was reading here just for fun lately, but decided to jump in on this one since it was a car dealership question. This one is very different isn't it.


                • #9
                  Originally posted by txlp View Post
                  This one is very different isn't it.

                  Whoa, yeah, big time.
                  I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


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