Legal Question in Employment Law in California

Holding final paychecks

#1. I know an employer can not withhold a final paycheck when and employee leaves the compamy...my question is...can an employer hold a commission check after an employee leaves the company. (In my case it was held 3 months--2 month guarantee period + 1 month)

#2. Can an employer deduct the ''draw'' from a final commission check if the employee no longer works for the company. For other employees they have not

asked employees to repay the draw after they have left the company.

Thank you for your time


Asked on 12/01/00, 4:45 pm

1 Answer from Attorneys
Thomas Pavone Pavone & Cohen

Re: Holding final paychecks

1. An employer may withhold commisions for the period needed to account for the information necessary to calculate the commissions. This should be about the same period needed to pay commissions for continuing employees. If there are charge-backs or other adjustments, the employer may be justified in delaying SOME of the commissions - however they should pay the sums that are clearly due and not subject to reduction. California Labor Code Section 202 and 203 provide penalties for an employer's failure to timely pay a departing employee his or her wages. I have seen the Labor Commissioner award 30 days wages in such cases. You may want to contact the nearest office of the Department of Industrial Relations, Division of Labor Standards Enforcement, to file a claim.

2. If the draw really is a draw, then the employer may deduct it from earned commissions. If you were employed for a long period and the employer didn't account for commissions and draws, it may be hard pressed to do so upon termination. Discuss this issue in detail, with a written account of your draws and commissions, with the labor commissioner when you file your penalty claim.

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Answered on 12/11/00, 1:18 am


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