Peabody v. Time Warner Cable, Inc., 59 Cal. 4th 662 (2014)

Susan Peabody worked as a commissioned salesperson for Time Warner Cable, Inc. (“TWC”).  Peabody regularly worked 45 hours per week but received no overtime.  TWC considered Peabody and the other members of the putative class to be subject to the commissioned employee exemption under California law.  However, most of Peabody’s paychecks did not pay her an hourly rate of at least one and one-half times the minimum wage (as required by the exemption).  TWC argued that the commission payments she received should be reassigned from the pay periods in which they were paid to earlier pay periods, which would result in total compensation to Peabody that exceeded one and one-half times the minimum wage.  In this opinion, the California Supreme Court answered the legal question posed to it by the United States Court of Appeals for the Ninth Circuit (where the matter was pending) as follows:  “[W]e conclude that an employer may not attribute commission wages paid in one pay period to other pay periods in order to satisfy California’s compensation requirements.”  See also McLean v. State of Cal., 2014 WL 4076745 (Cal. Ct. App. 2014) (employees who retire must be paid final wages consistent with the requirements of Labor Code § 202 (i.e., within 72 hours if no previous notice has been given to the employer or upon retirement if at least 72 hours’ previous notice has been given)).