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Fired in California? Don’t Lose Your Commissions (2024 Law)

In California, the law regarding commission pay after termination is governed by the California Labor Code, sections 201, 202, and 203. These codes aim to ensure that employees receive the commissions they have rightfully earned, including those accrued up to the date of termination. Employers are required to comply with these laws and provide timely payment of commissions to terminated employees.
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California Labor Code Sections 201-203 Explained

California Labor Code section 201(a) provides, in pertinent part, as follows:

If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.

California Labor Code section 202(a) then provides, in pertinent part, as follows:

If an employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter, unless the employee has given 72 hours previous notice of his or her intention to quit, in which case the employee is entitled to his or her wages at the time of quitting.

Notwithstanding any other provision of law, an employee who quits without providing a 72-hour notice shall be entitled to receive payment by mail if he or she so requests and designates a mailing address. The date of the mailing shall constitute the date of payment for purposes of the requirement to provide payment within 72 hours of the notice of quitting.

According to Collier Socks, these regulations impose stringent obligations on your employer [1]. In the event of termination, they are obligated to provide you with all outstanding wages on the day of termination.

Conversely, if you resign, they must settle your dues within 72 hours. Additionally, if you give at least 72 hours notice of your resignation, your employer must remit payment on your final day. Should you leave without immediate compensation, your employer is required to mail your final pay within 72 hours.

What Happens if Your Employer Fails to Meet California Laws on Commission Pay After Termination?

Under California Labor Code section 203, if your employer fails to meet the deadline for paying your wages, you may be entitled to a penalty equivalent to one day of wages at your standard hourly rate for each day beyond the deadline, up to a maximum of thirty days. These penalties, referred to as “waiting-time” penalties, can often surpass the amount of wages initially owed.

California Labor Code section 203 states:

If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. An employee who secretes or absents himself or herself to avoid payment to him or her, or who refuses to receive the payment when fully tendered to him or her, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which he or she so avoids payment.

It’s important to note that in order to qualify for these waiting-time penalties, you must be available to accept the payment when it’s offered. According to the statute, you cannot evade payment by concealing yourself or being absent, nor can you refuse to accept the payment when it’s fully tendered to you.

Also Read: Reporting Time Pay California

What is the Statute of Limitations for California Labor Code Section 203?

According to Kitchin Legal, under California’s Unfair Competition Law (UCL), a former employee may have the option to look back as far as four years to file wage and hour claims [2]. This means that even if an individual has been separated from their employment for over a year, they may still have the right to pursue unpaid wages from their previous employer.

Understanding this provision can provide reassurance to workers who may hesitate to pursue legal action while seeking new employment opportunities. Job seekers often prefer not to disclose ongoing legal disputes with former employers, particularly regarding wage and hour violations.

Initiating a lawsuit against a former employer for unpaid wages can empower a worker to seek justice and bring closure to a chapter of their life in a positive manner. By asserting their rights under California’s wage and hour laws, individuals can work towards resolving financial disputes and moving forward with confidence.

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The Litigation Group at Schmidt & Clark, LLP is an experienced team of trial lawyers that focuses on the representation of plaintiffs in lawsuits. We are handling individual litigation nationwide and currently accepting new legal challenges in all 50 states.

If you or a loved one was involved with these matters, you should contact our law firm immediately for a free case evaluation. You may be entitled to a settlement by filing a suit and we can help.

References:

1. https://www.collierlawsf.com/blog/2012/05/labor-code-sections-201-203-employer-must-pay-all-wages
2. https://www.kitchinlegal.com/how-long-file-lawsuit-unpaid-wages-good-news-california-employment-attorney/

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