©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 311 384 See DLSE Opinion Letter 1999.01.09, at 2 n.2. See also Marr v. Bank of Am., NA, 506 Fed. Appx. 661 (9th Cir. 2013) (“Deductions from ... commissions are permitted ... when (1) the deductions are tied to the employee’s sales rather than general business expenses, and (2) the employee agrees to the deductions by contract.”). 385 Lab. Code § 2751(a). 386 Lab. Code § 2751(b). 387 Lab. Code § 2751(c) (“commissions” for purposes of Labor Code section 2731 has the meaning set forth in Labor Code section 204.1). 388 Neisendorf v. Levi Strauss & Co., 143 Cal. App. 4th 509 (2006) upheld the denial of a bonus on the ground that the bonus plan expressly restricted payments to those persons employed by the company on the payout date, thus permitting the employer to avoid paying employees dismissed for cause between the end of the period in which the bonus was earned and the payout date, but the court left open the question whether the employer could deny an earned bonus to an employee who was absent by the payout date through no fault of the employee). 389 Lucian v. All States Trucking Co., 116 Cal. App. 3d 972, 976 (1981) (“an employee who voluntarily leaves his employment before the bonus calculation date is not entitled to receive it”). A different result might obtain if the employer requires the employee to remain employed after the calculation date. The DLSE, emphasizing that bonus law is subject to “principles of equity,” declined to approve a bonus arrangement that paid ordinary bonuses soon after they were calculated but that deferred part of extraordinarily large bonuses until the next fiscal year, and that would deny payment of the deferred portion to an employee who failed to remain employed until then. Although the employer explained that the purpose of the deferred payment was to encourage continued employment, the DLSE questioned why deferred payment applied only to extraordinarily large bonuses. DLSE Opinion Letter 1993.01.19, at 3 (“an argument could be fashioned which would convince a court that making an employee wait for an ascertainable bonus simply because the amount of the bonus exceeded a certain figure would be inequitable under certain circumstances”). 390 Lab. Code § 3751(a). 391 Ralphs Grocery Co. v. Superior Court, 110 Cal. App. 4th 694 (2003) (acknowledging that creating incentives for managers to reduce workplace injuries and resulting workers’ compensation costs advances goal of workers’ compensation system, but reasoning that “plain language” of § 3751 forbade Ralphs Grocery to consider workers’ compensation costs in calculating management bonuses). 392 Prachasaisoradej v. Ralphs Grocery Co., 42 Cal. 4th 217 (2007). 393 An example of the decisions the Supreme Court distinguished is Quillian v. Lion Oil Co., 96 Cal. App. 3d 156 (1970), which affirmed a judgment for a gasoline station manager who recovered unpaid bonus wages. The employer had unlawfully reduced the manager’s bonus by deducting from the predetermined amount of the manager’s bonus the full dollar amount of the cash and merchandise shortages at the gas station. Id. at 163. 394 42 Cal. 4th at 237. 395 Id. at 228. 396 Id. at 248 (Werdegar, J., dissenting). 397 Id. at 252. 398 Ralphs Grocery Co. v. Superior Court, 110 Cal. App. 4th 694 (2003). 399 Prachasaisoradej v. Ralphs Grocery Co., 42 Cal. 4th 217, 244 (2007) (“Ralphs’ profit-based supplementary ICP, designed to reward employees beyond their normal pay for their collective contribution to store profits, did not violate the wage protection policies of Labor Code sections 221, 400 through 410, or 3751, or Regulation 11070, insofar as the Plan included store expenses such as workers’ compensation costs, cash and merchandise shortages, breakage, and third party tort claims in the profit calculation.”). 400 Id. at 248 n.4 (Werdegar, J., dissenting). 401 Schachter v. Citigroup, Inc., 47 Cal. 4th 610 (2009). 402 29 C.F.R. § 778.209(b). 403 DLSE Enforcement Policies and Interpretations Manual § 49.2.4 (2002) (“Since the bonus was earned during straight time as well as overtime hours, the overtime “premium” on the bonus is half-time or full-time (for double time hours) on the regular bonus rate. The regular bonus rate is found by dividing the bonus by the total hours worked during the period ..., including overtime hours.”). 404 DLSE Enforcement Policies and Interpretations Manual §§ 49.2.4.2–49.2.4.3 (2002). 405 Alvarado v. Dart Container Corp., 243 Cal. App. 4th 1200 (2016). 406 Alvarado v. Dart Container Corp., 243 Cal. App. 4th 1200 (2016), rev. granted, No. S232607 (May 11, 2016). The question presented on review is: “What is the proper method for calculating the rate of overtime pay when an employee receives both an hourly wage and a flat sum bonus?” 407 4 Cal. App. 5th 542 (2018). 408 Id. at 568. 409 Id. at 574-75 (Cantil-Sakauye, C.J., concurring). 410 See 29 C.F.R. § 531.50(a). 411 Lab. Code § 351 (providing in full: “No employer or agent shall collect, take, or receive any gratuity or a part thereof that is paid, given to, or left for an employee by a patron, or deduct any amount from wages due an employee on account of a gratuity, or require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer. Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for. An employer that
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