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California labor law attorneys have recently received an extended explanation of \u201ccommission wages\u201d from the opinion given by the California Second Appellate District court. This explanation related directly to employees that are classified as exempt from overtime under the commissioned salesperson exemption. In the case <\/span>Areso v. CarMax, Inc<\/a><\/span>., <\/a>it was decided that CarMax\u2019s commission plan of a flat rate per sale would be considered commission wages.<\/p>\n Essentially the plaintiff Areso was unsuccessful in the class action in which he was claiming misclassification as exempt from overtime under the commissioned salesperson exemption and owed overtime. California labor law attorneys for Areso argued that overtime was owed because CarMax\u2019s commission plan did not meet the requirements as \u201ccommission wages\u201d under Labor Code Section 204.1<\/a>, which necessitates commissions to be \u201cbased proportionately on the amount or value\u201d of the sale of the employer\u2019s property or services.<\/p>\n California labor law attorneys for CarMax were pleased to hear the court found CarMax\u2019s commission structure is a \u201cperformance-based incentive system and thus fairly understood to be a commission structure<\/a>\u201d due to the language that commissions can be founded on the \u201camount\u201d rather than \u201cvalue\u201d of cars sold, interpreting \u201camount\u201d to mean the number of cars sold. Furthermore, the court agreed with labor law attorneys for CarMax\u2019s argument that prior decisions necessitate commissions to be base on \u201ca percentage of the price of the product or service\u201d (as first articulated in Keyes Motors, Inc. v. DLSE<\/a>, 197 Cal.App.3d 557, 563 (1987)) as dicta as it related only to the part of the statutory language in Labor Code \u00a7 204.1 interpreting the \u201cvalue\u201d of the product or service.<\/p>\n In order for someone to be considered exempt under the commissioned salesperson exemption, Labor Code Section 204.1<\/a>, the employee: The Court opinion also interpret the word \u201camount\u201d in the statute, and found that a flat payment for each car sold satisfies the statutory stipulation because the commissions are compensated based on the \u201camount\u201d or number of cars sold. Further, paying a flat amount for each car is \u201cproportionate\u201d because it is a one-to-one proportion where the \u201ccompensation will rise and fall in direct proportion to the number of vehicles sold<\/a>.\u201d<\/p>\n Flat fees and proportionate percentages can be a little confusing if you are unsure whether or not you are classified as exempt correctly you should contact a California labor law attorney<\/a> to examine your exemption status and determine if you are entitled to any back pay for overtime you may have worked.<\/p>\n Photo Credit: Shutterstock\/Billion Photos<\/p>\n","protected":false},"excerpt":{"rendered":" California labor law attorneys have recently received an extended explanation of \u201ccommission wages\u201d from the opinion given by the California […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[924],"tags":[],"class_list":["post-2709","post","type-post","status-publish","format-standard","hentry","category-commisson"],"acf":[],"yoast_head":"\n
\n\u2022 must be involved principally in selling a product or service (not making a product or rendering a service)
\n\u2022 The amount of their compensation must be based proportionately on the amount or value of the product or service.<\/p>\n
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