Draws
A draw is similar to a loan while the employee is on
the payroll. The commissions are used to "repay" the loan, thereby reducing the
indebtedness owed. However, a draw is a hybrid between a loan and a fixed
salary. It's like a salary because all payroll deductions must be taken out of
every draw check. As with any salary, a draw is considered wages. This means it
must be paid every pay period and vests upon the employee terminating
(voluntarily or involuntarily).
Draws against commissions to be earned at a later date
are legal only if the draw is equal to at least the minimum wage due the
employee for all hours worked in each pay period. The draw may be reconciled
against earned commissions at an agreed date or when the commission is earned
if there is an express agreement to that effect between the employer and the
employee. If no express agreement exists, the draw will be considered the basic
wage in lieu of salary and fix the employee's minimum compensation.
For a free consultation with an experienced employee
rights attorney, contact David Spivak:
- Email David@SpivakLaw.com
- Call toll free (877) 728-9741
- Visit The Spivak Law Firm, 16530 Ventura Boulevard Suite 312 Encino, CA 91436
- Fax (310) 499-4739
For further information on your rights in the work
place, please visit our other websites:
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