California Codes

Cal. Labor Code § 204.1 (2026)

✓ current as of May 2026

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Commission wages paid to any person employed by an employer licensed as a vehicle dealer by the Department of Motor Vehicles are due and payable once during each calendar month on a day designated in advance by the employer as the regular payday. Commission wages are compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the amount or value thereof.

The provisions of this section shall not apply if there exists a collective bargaining agreement between the employer and his employees which provides for the date on which wages shall be paid.

Notes of Decisions

Cited in 12 cases (3 in the last 5 years), 2006–2026 · leading case: Jerald Friedman v. Aarp, Inc., 855 F.3d 1047 (9th Cir. 2017).

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Jerald Friedman v. Aarp, Inc., 855 F.3d 1047 (9th Cir. 2017). “” Cal. Lab. Code § 204.1 (addressing commission wages in context of employees at car dealerships); see also Wayne v.”

Wayne v. Staples, Inc., 2006 Cal. Daily Op. Serv. 92 (Cal. Ct. App. 2006). · cites it 2× “o the viability of Wayne's first cause of action, therefore, is not whether a Staples' customer's principal purpose is shipping his or her package, rather than obtaining insurance against loss or damage to that package during transit, but whether Staples' 100 percent markup on…”

Areso v. CarMax, Inc., 195 Cal. App. 4th 996 (Cal. Ct. App. 2011). “) Labor Code section 204.1, applicable to employees of vehicle dealers such as CarMax, provides: “Commission wages paid to any person employed by an employer licensed as a vehicle dealer .”

Takacs v. AG Edwards & Sons, Inc., 444 F. Supp. 2d 1100 (S.D. Cal. 2006). “2d 2 , citing to Cal. Labor Code § 204.1 . First, Defendant’s argument that there is no requirement for a sales analysis is misplaced.”

Harris v. Inv.'s Bus. Daily, Inc., 2006 Cal. Daily Op. Serv. 2685 (Cal. Ct. App. 2006). “the minimum wage if more than half of that employee’s compensation represents commissions.” (Cal. Code Regs, tit. 8, § 11040, subd.”

Maddock v. KB Homes, Inc., 248 F.R.D. 229 (C.D. Cal. 2007). “2d 2 (quoting Cal. Lab.Code § 204.1). Accordingly, how KB Home sales agents’ commissions are calculated, as well as the portion of sales agents’ earnings comprised of commissions, is relevant to determining whether KB Home sales agents fall within the commissioned pay exemption.”

Burden v. Selectquote Ins. Servs., 848 F. Supp. 2d 1075 (N.D. Cal. 2012). · cites it 4× “More Than Half of the Compensation Constituted Commissions The parties’ dispute centers on the second element for the overtime exemption; namely, whether more than half of Burden’s compensation represents “commissions.”

Hammitt v. Lumber Liquidators, Inc., 19 F. Supp. 3d 989 (S.D. Cal. 2014). “Although the wage order does not define the term “commission,” California Labor Code section 204.1 provides that “[c]ommission wages are compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the…”

Monaghan v. Telecom Italia Sparkle of North Am., Inc., 647 F. App'x 763 (9th Cir. 2016). “Even if TISNA is correct that the $16,250 in quarterly incentive compensations that Monaghan earned throughout his employment with TISNA were “bonuses,” and not “commissions” within the meaning of California Labor Code § 204.1, TISNA has failed to explain or to cite any…”

Kleinberg v. Landmark Dividend CA2/8 (Cal. Ct. App. 2022). “Ramirez quoted with approval from a Court of Appeal decision: “ ‘Labor Code section 204.1 sets up two requirements, both of which must be met before a compensation scheme is deemed to constitute “commission wages.”

Sanzone v. DCH Korean Imports CA4/3 (Cal. Ct. App. 2024). “In the first amended complaint, Sanzone added four wage and hour causes of action: (1) failure to pay wages for all hours worked and for work performed separate and apart from the piece (Lab. Code, §§ 204.1, 221, 226.2, 1194, 1194.”

Sorokunov v. NetApp, Inc. (Cal. Ct. App. 2026). “’ (Lab. Code § 204.1 (emphasis added).) However, this is not a class action, and so there is no defined certified class.”

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