Sales Commissions

News & Analysis as of

California Supreme Court Limits the Use of California's Commissioned Salesperson Exemption

The California Supreme Court recently released an important decision regarding California's "commissioned salesperson" exemption. To qualify for this exemption to California's overtime laws, an employee must: (1) earn at...more

Employment Law: August 2014

California Supreme Court Weighs In On Commission Wages - Why it matters: Employers in California that pay commission wages should familiarize themselves with a new decision from the California Supreme Court limiting...more

FLSA Collective Action Waivers In Separation Agreements May Not Be Valid In 6th Circuit

Employees discharged as part of a company restructuring can participate in a collective action lawsuit for unpaid overtime wages under the Fair Labor Standards Act (FLSA) despite waiving their collective action rights in...more

Feds Get Technical! Technical! (Sung to Olivia Newton John’s “Let’s Get Physical” of course)

We already know that California’s exempt/non-exempt classification scheme is a complicated system of checks and balances that takes most employers the help of an attorney to traverse. Well, just so we don’t get overly...more

California Supreme Court Clarifies Commissioned Employee Exemption

Peabody v Time Warner Cable, Inc. (July 14, 2014, No. S204804) 2014 Cal Lexis 4755, came to the California Supreme Court from the Ninth Circuit, through a certification procedure that is used when a question can determine the...more

All Change for Holiday Pay?

The European Court of Justice (ECJ) has considered whether commission payments should be taken into account when calculating holiday pay in the recent case of Lock v British Gas Trading Limited (C-539/12)....more

The Commissioned Salesperson Exemption Just Got More Difficult to Establish

Many California employers rely on California's commissioned salesperson exemption from overtime for their inside sales employees. That exemption, however, is becoming increasingly difficult to establish. A recent decision...more

California's Inside Sales Exemption May Be Lost Where Commissions Are Paid on a Monthly or Less Frequent Basis

A recent California Supreme Court decision significantly impacts pay practices for commissioned sales employees. On July 14, 2014, the state Supreme Court ruled in Peabody v. Time Warner Cable, Inc. that an employer may not...more

The Second Prong of The Inside Salesperson Test – Is the California Supreme Court Poised to Upend The Commissioned Employee...

In Peabody v. Time Warner Cable, Inc., the California Supreme Court clarified that, to satisfy the commissioned employee exemption, employees must be paid more than 1.5 times the minimum wage in the employee's actual pay...more

It’s Time to Revisit Commission Pay for California Employees: Commissions Earned Must be Paid Twice Per Month and the Commissioned...

You may have just started breathing easier after rolling out written commission agreements to comply with California Labor Code section 2751. However, a recent unanimous California Supreme Court decision has heads turning...more

Additional Fees on Securities Transactions – FINRA Sees No Justification

In an area of broker-dealer practices with relatively little guidance—the appropriate level of commissions or mark ups on securities trades—FINRA recently brought another in a series of cases that provides insight into the...more

Peabody Decision Tightens Requirements for Commission Payments and Exempt Status

State and federal law create an exemption from overtime compensation for employees engaged in sales who satisfy specific criteria. Although the requirements under each set of laws are not identical, each generally provides...more

Seeking Credit for Deferred Commissions? You Might Get Declined

Last week, the California Supreme Court issued its decision in Peabody v. Time Warner Cable, Inc., deciding that employers may not apply commission payments to earlier pay periods for the purposes of establishing that an...more

Fenwick Employment Brief - July 2014

California Employees Can Waive Class Claims In An Arbitration Agreement, But Not PAGA Claims - Resolving an issue that has created uncertainty for California employers, the California Supreme Court recently held in...more

California Supreme Court Splits From Federal Law on Commissioned Employee Exemption Compliance

On July 14, 2014, the California Supreme Court clarified the commissioned employee exemption from overtime under California law. In Peabody v. Time Warner Cable, Inc., the court confirmed that calculations necessary to...more

California Supreme Court Ruling Limits Commission Wage Allocation

On June 14, 2014, the California Supreme Court held that employers could not satisfy California’s compensation requirements for the commission sales exemption by attributing commission wages paid in one pay period to other...more

California Employers May Not Allocate Commissions Paid In One Pay Period To Different Pay Periods To Satisfy California Wage And...

The California Supreme Court recently considered whether an employer may allocate an employee's commission wages from one pay period to other pay periods in order to meet the commissioned employee overtime exemption. (Susan...more

California Supreme Court Clarifies Requirements of Commissioned Employee Exemption

In recent years there has been substantial litigation regarding whether and how employers may satisfy California minimum wage requirements for compensation plans involving commissions. In Peabody v. Time Warner Cable, Inc.,...more

Real estate salesperson succeeds in mission to collect commission

A.R.S. § 32-2152 allows a real estate broker or salesperson to file a court action to collect earned compensation if he was a “qualified licensed broker or salesperson at the time the claim arose.” In Focus Point Prop., LLC...more

Commission-Based Sales Agreements for Medical Supplies and Equipment: More Whistleblower Activity on the Horizon? - A Wide Range...

The common industry practice of compensating independent contractor sales representatives on a "percentage of sales" commission basis may be creating an enhanced risk of False Claims Act liability for illegal kickbacks in...more

Latest CFPB RESPA Enforcement Action Targets Employee Referrals

Last week, the CFPB announced its latest RESPA enforcement action, adding to one of the CFPB’s most active areas of enforcement. In this case, the CFPB required a New Jersey title company to pay $30,000 for allegedly paying...more

Holiday Pay in the United Kingdom: Commissions Must Be Included

The European Court of Justice recently issued a decision about the calculation of holiday pay which will have potentially important consequences for employers. In British Gas v Lock, the Court held that holiday pay in respect...more

Holiday pay must include commission, ECJ rules

Kate Hodgkiss, Partner in the Edinburgh office, comments: The European Court of Justice (ECJ) has today handed down judgment in a case which could mean that employers face huge liabilities for claims for holiday pay. The...more

Court Rules Commercial Real Estate Broker Can’t Collect Commission Because Of Involvement Of Unlicensed Salesperson

Last month, the U.S. District Court for the Eastern District of Virginia held that a state-licensed real estate company was unable to collect its commission on a real estate lease transaction because a key employee involved...more

Tax Reform Proposal Takes Aim at Executive Compensation

On February 26, 2014, U.S. Congressman Dave Camp released a comprehensive tax reform proposal that includes several provisions intended to limit or restrict executive compensation. Congressman Camp’s proposal includes the...more

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