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100% Recoverable Draw & Minimum Wage & PTO law dispute in CA

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  • 100% Recoverable Draw & Minimum Wage & PTO law dispute in CA

    100% Recoverable Draw vs Non Recoverable Draw Dispute California
    I am a W-2 Inside sales rep w/ a 100% recoverable draw in the state of California. At the same time, I might also be an hourly 100% recoverable draw sales rep as well. I have a 3 part question to this madness:

    1) Our company gives it's sales reps up to a $2,500 month 100% recoverable draw if we work 40 hours a week (equates to about $15/hr). Should we fund $0 commissions for that particular month, the following month we would now owe the company $5,000 until it's paid back and can continue to go up. We clock in and out every day to keep track of our hours and are paid bi-weekly, and since it's virtually impossible to clock in and out with exactly 80 hours, often times we turn in our time cards with say 78.5 hrs +/- total for the 2 weeks. In this scenario our draw would be: 78.5 hrs X $15 = $1,177.50 + lets say the next 2 weeks we have the same hours for the sakes of this example, so in total we get $2,355 for that month, which is now what we would owe our company, and they would deduct from commissions for that month. Should you "blank" or put up a "donut" for that month, than you would now owe $2,355 + (lets say the following month you get $2,380 in hours, than you would now owe from the previous month which adds up to: $4,735.00. HERE COMES THE ISSUE: In the state of California you are required to give a W-2 employee around $8 hr as part of the minimum wage, so $8 X the # of hours worked in a month lets say comes to $8 X 157 hrs/month which equals $1,256.00 - if you made $2,355 for that month as your 100% recoverable draw, shouldn't the hourly wage of $1,256.00 be non recoverable of the $2,355, and the difference could be collected as recoverable (which is $1,099)? Otherwise, I feel it's almost like a company giving you a loan to pay back at 0% interest, and really you are not making an hourly wage since you have to pay it back to the company with future commissions - also if we work over-time then that also gets added to our recoverable draw and it's just that much more we have to pay back - What do you think - do you think this is illegal why or why not - I know an outside sales rep can be compensated by a 100% recoverable draw, but there are separate laws that apply to inside sales reps? (Our company as of about 4 months ago didn't have us clock in and out and just gave us an even $2,500 recoverable draw for the past 5.5 years as a salary, but now they keep track of our hours by us clocking in and out and seem to pay us hourly + commissions - We are not sure if we are hourly or salary inside sales reps to this day because we pay a 100% recoverable draw back with future commissions, & we clock in and out, and we are W-2 employees).

    2) In the state of California a employer does not have to give Paid Time Off (PTO) - which includes sick days and vacation days, however our company offers this to us BUT we don't necessarily get PTO because we have to pay it back with our future commissions we make, which seems counter productive because the word "Paid" in "Time Off" is just being added to our 100% recoverable draw, and we just end up owing it now back to the company, so really it's not "Paid Time Off". What do you think - do you think this is illegal why or why not?

    3) In the 6 years I have been with the company I have earned about 60 days that I have not used as vacation days (PTO). As of last week we were told that they will no longer offer PTO, which is fine and is not illegal, however all of the days we have accumulated will now be used to cover future time off. For example: If I am sick, or take a vacation for 5 days, They are making it mandatory that we use our Paid Time Off Days till it reaches 0 (zero). I have been committed to the company for 6 years and earned these 60 days fair and square, but because of this new policy we feel we are getting screwed somehow. I found an article that mentions this, and it says an employer cannot take PTO days away from you once they are earned, but that is so general and I don't know what that means in my situation - What do you think - do you think this is illegal why or why not?

  • #2
    Duplicate post.

    The website tries to discourage people from posting the same question more then once.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      Sorry, I thought I might get a better response if I posted in this category because I had a 3 part question. Anyone can feel free to respond to this thread under the Category "LABOR LAWS" I posted yesterday April 2nd (Saturday).

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      • #4
        Generally all employment law responders read all the employment law sub forums so
        your question just needed to be posted once - just for your info.
        Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

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