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Perspective

Jun. 16, 2011

Commission Accomplished: The 2nd District Issues Surprising Decision

The 2nd District's definition of "commission" may take employers and lawyers by surprise. By D. Gregory Valenza of Shaw Valenza


By D. Gregory Valenza


The definition of "commission" can mean the difference between an employee who is entitled to overtime pay and one who is exempt from overtime and other wage-hour laws. Both federal and California law exempt retail salespersons who earn at least 50 percent of their wages via commissions (along with other requirements). An incentive payment that does not qualify as a commission is not counted towards the 50 percent threshold.

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