How Often Must Employers Pay Commission in California?

How often must employers pay commissions in California?

Commissions must be paid at least as often as other wages generally at least twice per calendar month under Labor Code Section 204. If the written commission agreement provides for monthly payment and meets California’s requirements, monthly payment may be permissible for commissions specifically. In all cases, payment cannot be delayed more than 7 days after the close of the pay period in which the commission was earned. 

Can my employer hold my commission for 60 or 90 days after the sale?

Only if the written commission agreement expressly provides for that delay and ties the earning event to a payment that has not yet occurred such as customer payment received after 60 or 90 days. If your agreement says commissions are earned at the time of the sale, a 60-day hold has no contractual basis and constitutes an unlawful late payment with interest accruing from the day after the applicable payday.

What happens if my employer doesn’t have a written commission agreement?

Failure to provide a written commission agreement is itself a violation of Labor Code Section 2751. Without a written plan, ambiguities about payment timing are resolved in the employee’s favor  typically meaning the commission is treated as earned at the time of the sale and due on the next regular payday. 

Is there interest on commissions paid late in California?

Yes. Under Labor Code Section 218.6, 10% annual interest accrues on any commission not paid when due, from the date it was originally payable.

What are my rights to commission payment in my final paycheck?

At termination, all earned commissions that can be calculated must be included in the final paycheck on California’s strict timeline immediately upon discharge or within 72 hours of resignation without notice. Commissions that cannot yet be calculated must be paid as soon as the amount is determinable.

Can my employer delay paying my commission until after the customer pays them?

Only if this condition is clearly and expressly stated in a written commission agreement. Even then, once the employer receives the customer’s payment, the commission must be paid on the next applicable payday no further delay is permitted. Employers who deliberately delay customer invoicing or collection to push back commission obligations face bad faith and wage theft claims.

How long do I have to file a claim for late commission payments in California?

Generally three years from each violation under the California Labor Code, or four years under California’s Unfair Competition Law. Because late payment violations recur with each delayed commission, the full limitations period can capture a substantial history of violations and accrued interest.