Yesterday a friend of mine overheard me telling someone else that I pay my employees on a commission basis (30%) of total of all jobs. She said that was not legal. Today she sent me a document from the State of California Department of Industrial Relations Division of Labor Standards Enforcement.
That document does say you can pay wages as Piece Work. However this friend was saying that you can’t pay them piece rate unless they are making some widget.
My question to you is “Is this true?” I’m in the State of California. Perhaps our labor laws are different from other states.
I know that All County Window Cleaning (WCR) pays purely on commission.
We have found that commission pay is much better than hourly wages because it provides built in incentives to complete more work in an hour.
Your thoughts?
Brian Anderson
Master’s Window Cleaning
Sacramento, CA
[COLOR=#000000][FONT=arial]Brian I would recommend you give these people a call asap - [/FONT][/COLOR]Welcome to Seawright & Associates, Inc.[COLOR=#000000][FONT=arial]
[/FONT][/COLOR]
[FONT=arial, sans-serif][COLOR=#000000]Laws change all the time (literally every year) - and in a lot of cases the state law contradicts the federal. Jean and her team are extremely knowledgeable. We conference with them once a year just to make sure we are on the up and up. [/COLOR][/FONT]
[FONT=arial, sans-serif][COLOR=#000000]You want to be certain you dont end up with a large compliance bill a couple of years later. It happens all the time. (it happened to me)[/COLOR][/FONT]
Yeah as far as I know it’s not a problem as long as you do it right. As far as I know from my PEO as long as they average minimum wage or above it’s all good. That’s how car salesmen get paid.
I believe you are right. The problem, though, is if you tell them they are getting about a third of
the take in, they know what you are taking in and they will may want the other 2 thirds.
Guys I got a $19,000 bill in the mail because of one little mistake in the pay we paid or commission guys. If theres any question in mind I cant recommend enough consulting with a professional. And Im not talking about a general lawyer or accountant… They dont have a clue about the labor laws.
Im not trying to be harsh here… I just really want to make sure people dont put there companies at risk like I did.
That’s good advice. I talked with my PEO and it’s basically what Mark said. Your commission is a draw against your hourly. I’m going to be talking with them again today to get it all set up this way. My PEO company are professionals. That’s what I pay them for. And from everything I gather it’s legal here in Cali. If I hear anything different I’ll post up.
No we do it in house… BUT we were going on our CPAs advice when we did it the wrong way. CPA for the most part dont have a clue about labor laws especially because there is always conflicting info on the state then federal level… and they change every year.
Im not saying its not important to have one, it certainly is… But when dealing with payroll… I just think you should get someone a little bit more specialized…
An Extreme Example: Your having heart problems, do you go to a general DR or a cardiologist who will know more about the potential problems?
yea thats a good point. with the payroll you guys have its probably cheaper to do it in house. For only a few guys having a firm care for it all is nice. But as you highlighted not all CPAs are created equal
Just finished up with my PEO rep. And yep it’s legit. As long as your employee makes more than minimum wage plus any overtime you’re good to go. Just keep timesheets to verify hours vs. gross pay.
