COMMISSIONS, BONUSES, & INCENTIVE PAY
Have You Been Fully Compensated for Commissions, Bonuses, and Other Incentive Pay?
Many employers offer incentives, such as commissions and bonuses, as part of their compensation packages in order to motivate employers to worker harder. Under California law, these payments are considered wages and must be paid in a timely manner.
Calculating the amount of commissions and bonuses due and the date they are considered “earned” can be complicated, particularly when an employee is terminated or quits while payments for commissions and bonuses are still outstanding. California requires employers to provide their employees with a written commission plan agreement describing how the commissions are to be calculated and paid. Determining how much an employee is owed and when the incentives must be paid out requires a careful examination of the terms of this agreement.
In addition, because commissions and non-discretionary bonuses are a form of wages, employers are required to factor these payments into the overtime rate for non-exempt (i.e., hourly-paid) employees. Many employers fail to properly factor commissions, bonuses, and incentive payments into their employee’s overtime rates, resulting in the significant underpayment of wages.
If your employer has unlawfully withheld earned incentive pay or has failed to include these wages in your overtime pay, call us today for a free consultation.