How Long Does A Company Have to Fix a Payroll Error? | Grey Law
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How Long Does A Company Have to Fix a Payroll Error?


Getting Paid in California: Rules Governing Paycheck Errors or Lack of Payment

Every state sets its own “payday rules.” This means that you could be paid twice a month in California, as is the standard required by law, but if you move to Oregon, you might not receive your first check for up to thirty-five days! That said, there are also laws governing a lack of a paycheck, overpayment and underpayment by your Californian employer. There are also laws governing how long your employer has to correct paycheck errors. If you are also a commissioned employee (i.e., you work on commissions instead of salary or hourly wages), then you have a right to get paid according to California’s laws for these types of employees.

Focusing on Commissioned Work in Los Angeles

For the sake of argument, let’s say that you are a commissioned employee working in Los Angeles. Commissioned employees under California labor laws should be paid twice a month. However, the law stipulates that the commission has to be earned before it can be paid with the semi-monthly pay period. Ergo, if you think you earned a commission on a sale, but the customer brings that purchased item back before the end of the pay period, you do not earn that commission. Likewise, you cannot be paid the commission if it falls near the very end of a pay period and you have to wait for the commission to be verified.

Do You Need a Los Angeles Workplace Lawyer?

An employment attorney in Los Angeles is someone who specializes in employment law. In general, this type of lawyer may handle everything from discrimination cases to harassment cases to wage discrepancies. There are very specific branches of employment law for nearly every kind of employment issue. If you think you have a big problem regarding working on commission, you should consider scheduling a consultation for legal advice.

Unpaid Commissions

In the event that there is no disputing that you earned said commissions during a pay period, your employer has to do one of two things under California law. If the earnings are less than five percent of your total paycheck, he/she actually has until the next paycheck to rectify the situation and can in fact add the missing commission amount to the next check. As frustrating as that is, it is perfectly legal. If the amount is much more than that, your employer is required by law to cut you a new check with/for the missing commission amount.

People in your position pursue payment from any employer that has refused or avoided paying you commissions owed. While it is rare, there may be a valid reason, such as a company-wide bankruptcy that can delay payment. However, you are still entitled to that money that you earned. The lawyer you hire should be able to get you the money owed with nary a battle in court. Most of these cases, when the amounts are not huge, can be settled outside of court rather quickly.

Overpayment of Commissions

It is quite common to assume that because you get a huge commission payment on a paycheck that you actually earned that. It may be that you were mistakenly overpaid! It doesn’t take much to accidentally hit an extra zero or an extra digit into an accounting and payroll sheet, and then whoops! There you go! An employee is overpaid. This happens with commissions much more often because of the amounts earned on commission sales. If you do not report the error and just spend the money, your employer has a legal right to recoup that money however he/she sees fit.

For example, let’s say you sold a car and earned a commission of $3,000. Your employer tallies up your commissions for the pay period and accidentally enters $30,000. That’s quite a nice paycheck, yes? Unfortunately, if you spend that extra $27,000 that isn’t yours to spend, your employer can dock every check of yours going forward until the total sum of overpayment has been recouped. That will make a lot of your paydays very depressing. It also makes your employer very generous, considering that he/she can just fire you for being dishonest and stealing from the company instead.

If you find that you have been overpaid on commission sales, a lawyer is the best person to consult. Usually they will tell you to do what is right; hold onto the money in a checking account, report the error to your boss, and then return the money when your employer requests it are a few suggestions we normally provide. Some employers may allow you to keep the money so long as there is a contract, a legally binding agreement that states that you have made a special arrangement for the advancement of your commission sales and that you have to remain employed to that employer until the amount has been earned and/or repaid.

Consulting a Los Angeles Commission Dispute Attorney

If you think you should have been paid a certain commission and you were counting on that commission to come through, you might want to consult a Los Angeles commission dispute attorney. These legal professionals are able to answer all of your questions regarding commission sales and earnings, when you should be paid, when you should have received it, and whether or not you should pursue a legal suit against an employer for failure to pay.


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