Legal Question in Employment Law in California
Is straight commission contrary to code 2802?
I own a small business that employs outside sales people. Employee earnings are commission only. Only in instances where I have specifically asked an employee to incur an expense on behalf of my company, have I reimbursed that expense. My employees understand that the straight commissions they receive cover their normal expenses. Now, an ex-employee is suing me for reimbursement of motor vehicle, phone and fax expenses under code 2802. The employee worked for me for 4 years and never attempted to claim other than legitimate expenses previously. Is ''straight commission'' contrary to code 2802?
Many thanks for your answer.
2 Answers from Attorneys
Re: Is straight commission contrary to code 2802?
The method ofcompensation is not at issue. Whether an employee is hourly, salaried or commissioned, he is entitled to reimbursement for expenses that are a direct consequense of his employment. Thus if it was expected that an employee would use his own car to visit sales prospects, he is entitled to reimburesement at the Internal Revenue Service rate of about 37 cents per mile. The same applies to telephone and fax and other reasonable expenses. You can insist on weekly expense reports and discipline employees who fail to comply, but you will never be excused from paying the legitimate expenses.
Re: Is straight commission contrary to code 2802?
It is quite apparent you have not sought legal advice from an attorney representing you. You need to do this. Four years of such expenses and then fines that the labor board will very likely add to the total can be overwhelming. Do not wait.
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