Is it legal for a company to use a commission with a draw system in a sales environment?
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Is it legal for a company to use a commission with a draw system in a sales environment?
Forcing the employees to work doing more then just sales but to pay back any pay not made if not met at the Minimum Wage Standards. So if I make $6 an hour with commission the company will pay the state minimum wage of 8, however, you are forced to pay that $2 an hour back in the following weeks or face being fired? Also, if working over time commission is not increased but the rate you are expected to make is. How legal is this, especially with no contract signed?
Asked on December 24, 2011 under Employment Labor Law, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you are an actual employee, you are required under state law of most states in this country to have a minimum wage regardless if you are on a commission basis or not. Meaning, what you have written is not proper if you are an actual employee versus being an independent contractor.
Independent contractors who are not subject to the control and direction of the employer can receive a base draw and then be required to repay so much back if the required performance threshholds are not met.
If you are technically an employee for your employer where deductions are taken out of your pay check every time you receive it, you are required to get minimum wage no matter what sales are met. You would also get overtime pay if applicable.
In most working environments, employees get so much per hour and then added commission as an incentive to sell.
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