Semprini v. Wedbush Securities, Inc.
Annotate this CaseDefendant Wedbush Securities, Inc. (Wedbush) was a securities broker-dealer firm that provided financial planning and investment products through its financial advisors. It classified its California financial advisors as exempt under the administrative exemption to California wage-and-hour law; the administrative exemption only applied if an employee earned a monthly “salary” equivalent to at least twice the state minimum wage. Wedbush pays its financial advisors on a commission-only basis. It uses a computer program to track the trades they make in a given month and then calculates the compensation owed based on what commission tier the employee met that month. The higher the employee’s total monthly gross product sales, the higher the percentage used to calculate the employee’s monthly commission payment. The central issue in this case is whether the Wedbush compensation model meets that administrative exemption requirement. The Court of Appeal determined the compensation plan based solely on commissions, with recoverable advances on future commissions, did not qualify as a “salary” for purposes of this exemption. Since the trial court found the employees in question were exempt and entered judgment for the employer, the Court reversed and remanded this matter for further proceedings.
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