A new addition to California law changes the definition of commission pay for licensed employees of beauty salons and barber shops. Under the new law, certain common arrangements, such as agreements to pay stylists on a commission-only basis or on a minimum wage plus commissions basis, are no longer considered to be commission-based pay.

California Senate Bill 490 (SB 490) adds Section 204.11 to the California Labor Code. In short, the new law specifies that wages paid to employees who are licensed and paid to provide services pursuant to the Barbering and Cosmetology Act qualify as commissions (either as a percentage or a flat rate), only if the following requirements are met:

  1. the employee’s base hourly rate is at least two times the state minimum wage in addition to commissions paid; and

  2. the employee’s wages are paid at least twice during each calendar month on days designated in advance by the employer as regular paydays.

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