California Employee Loan Repayment Agreement

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[1] In California, an employer may pay draws against commissions that can be recovered or voted on during the salary period during which commissions are paid, as long as the employee works under a good faith commission agreement and the minimum wage conditions are met for each salary period. California courts recognize the applicability of duly developed employment contracts, including the recovery of advanced commissions by recovering future wages advanced in a compensation system. It is illegal for an employer to withdraw a debt – such as a credit, advance or overpayment – from the wages a worker earns. For example, the California Court of Appeal held that a public employer made an illegal deduction of employee wages when it deducted an involuntary overpayment from a previous salary period. Employees owe a debt to the employer, but the employer was an ordinary creditor and therefore obliged to comply with the state`s law on trim, the court said. In response, california`s legislature passed legislation that allowed the state to redress the debts of state employees, but did not extend that privilege to private employers. It is clear that an employer should obtain written authorization to deduct in cases where deductions are allowed. [2] If the compensation agreement consists only of advances or commissions, the agreement must be carefully recalled in writing so that the employee fully understands how the commission is calculated, what the conditions apply to the result and payment, and to what extent the excess commissions are due and payable as term receivables. Employers continue to be challenged by claims from laid-off workers who have received wage deductions on the debts they owe to the employer. In a recent case, employees filed a class action lawsuit in a federal court in California seeking appeals for violations of California`s California law and the Federal Fair Labor Standards Act (FLSA) for deductions on their final salary reviews on debt balances.

The Bundesgerichtshof ruled in favour of the company on all claims. Ward v. Costco Wholesale Corporation. According to the California Labor Code, employers can make deductions on workers` wages if the deductions are: 3. Employers must cover the cost of workers` mistakes. b. Photographs. If an employer needs a photo of a candidate or worker, the employer must bear the cost of the photo. Labour Code Section 401 Employers` Commission or Incentive Plans sometimes allow employers to make certain deductions. The legality of these agreements depends on how they are developed.

For example, it is legitimate to require advances or draws to be voted against winning commissions. Similarly, in some situations, employers may reimburse overpaid commissions, for example. B if the goods are returned. Indeed, the Tribunal justified the deduction of the entire balance by the fact that between compensation due for “unworked hours” and hours of work due for hours worked, there was compensation. Since all of Costco`s deductions were less than “non-remuneration” or leave pay due as a final wage, there was no deduction that put workers` earnings below the national or federal minimum wage. After he found no infringement, the rights of the federal state and the federal states, including claims and “waiting times”, were rejected. Employers who provide employees with uniforms and equipment should not apply deductions on employees` final salary for the costs of unturned positions, as the California Division of Labor Standards Enforcement does not consider that such deductions are authorized by the state`s garrison statutes and worker engagement.