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final check accrued vacation for commission only employees California

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  • final check accrued vacation for commission only employees California

    I have searched and cannot seem to find a concrete answer. If we have commissioned only employees that accrue vacation benefits like everyone else upon termination how are the accrued vacation hours to be paid out. The employees have a minimum wage draw against commissions.

    Would the accrued vacation be paid out at minimum wage?

    In Suastez v Plastic Dress-up it was opinioned that with commissioned employees, an employer may limit vacation pay to the amount of the draw.

    Any thoughts or is this correct.

  • #2
    If the employee took vacation, how much would you pay? Why would it be any different when they leave?
    I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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    • #3
      Originally posted by ElleMD
      If the employee took vacation, how much would you pay? Why would it be any different when they leave?
      commission only sales people usually only take vacation when they are happy with their commission pipeline and expected commissions. If they do not earn any commissions they are paid state min wage + any overtime if warrented as a draw. These are inside sales people.

      If they accrue two weeks a year, take one week vacation in a month where they earn $10,000 in commissions and then resign with a weeks worth of accrued vacation on the books, how is the week remaining on the books paid out to the employee? If the employee generated no commissions for the month and wanted to take a week it would be paid out at min wage.

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      • #4
        For my sales folks, our policy is to pay vacation based upon their base plus commission over the previous quarter.

        I hated it when I was a technical recruiter and got minimum wage for vacation time and that counted as a draw to be paid for out of my commissions.

        It all depends on what your policies are. I doubt state laws regulate this.
        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.

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        • #5
          But Scott, this is California we're talking about here.

          Actually, I did find one opinion letter regarding this issue. Although legally, opinion letters are only binding on the employer that requested them, it does reflect the stance of the state regarding the subject. Unfortunately, it doesn't help a whole lot, because it really only addresses paid vacation in relation to the amount of a draw. But it might help some.
          http://www.dir.ca.gov/dlse/opinions/1986-11-17.pdf

          And the end of the letter is the most critical. Review the policies and make sure you have clearly spelled out how the vacation is to be paid for your commission-only employees (with or without draw).
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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          • #6
            Thank you very much for the responses.

            Thank you Patty. I had seen that letter before but could not relocate it so I appreciate the link as it was what I was looking for. Our policy is clear on vacation for sales people but I just wanted to make sure.

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            • #7
              What if written Vacation Policy is silent on "calculated payout" ?

              Originally posted by Pattymd View Post
              But Scott, this is California we're talking about here.

              Actually, I did find one opinion letter regarding this issue. Although legally, opinion letters are only binding on the employer that requested them, it does reflect the stance of the state regarding the subject. Unfortunately, it doesn't help a whole lot, because it really only addresses paid vacation in relation to the amount of a draw. But it might help some.
              http://www.dir.ca.gov/dlse/opinions/1986-11-17.pdf
              And the end of the letter is the most critical. Review the policies and make sure you have clearly spelled out how the vacation is to be paid for your commission-only employees (with or without draw).
              In California: I am paid Salary+Commission+Bonus. Our Vacation Policy is published in our online Employee Manual and only addresses the Number of Vacation Days which may accrue based upon one's years of service. It does NOT address how much vacation pay will be paid out.

              The company has been paying Salary only for the past 3 years. This represents only about 25% of my total daily wages (salary, comm, bonus) as averaged over the past 3 years. Am I entitled to be compensated for the full average daily wage for the past 3 years?

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              • #8
                Duplicate post under an old thread - do not reply to. Poster (BJmn) started a new thread with the question.
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