Court Opinion

ID: 4132242
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:24:32.744786+00
Date Added: 2024-06-11T14:22:11.813471
License: Public Domain

The Attorney                  General of Texas
                                             March    17,   1978

JOHN L. HILL
Attorney General

                   Mrs. Mary E. Evins, C.E.C.                         Opinion No. H-1138
                   Chairwoman
                   Texas Private Employment Agency                    Re: Application of the Texas
                    Regulatory Board                                  semimonthly pay law to earned
                   Box 12157                                          commissions.
                   Austin, Texas 787ll

                   Dear Mrs. Evins:

                         You explain that many employees           in private employment   agencies are
                   paid on a commission basis, and ask:

                               Are commission payments which were previously
                               earned and are due and owing to an employee
                               considered “wages” and therefore     covered by the
                               provisions of the Texas Semimonthly Pay Law . . .?

                         In pertinent   part, article 5155, V.T.C.S., reads:

                               Every person . . . employing one (1) or more persons
                               . . . and every . . . corporation engaged in any business
                               within this State . . . shall pay each of its employees
                               the wages earned by him or her as often as semi-
                               monthly, and pay to a day not more than sixteen (16)
                               days prior to the date of payment.

                   See generally   Attorney General Opinion H-842 (1976); H-388 (1974).

                         Your question concerns only “employees ‘I; therefore, we need not discuss
                   the compensation of independent contractors who might be paid commissions,
                   or of other agents not within the scope of a master/servant relationship. See
                   Shahan v. Biggs, 123 S.W.2d 686 (Tex. Civ. App. - Fort Worth 1938, no wrm
                   The question is also limited to situations where the commissions are “due and
                   owing to an employee,” so we need not determine under what conditions, or
                   when, commissions become due.

                         The semimonthly pay day law, first enacted in 1915, was amended in
                   1933, and amended again in 1957. We think the term “wages” as used by the

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Mrs. Mary E. Evins, C.E.C.   -   Page 2     (~-1138)

statute encompasses commissions paid to employees        as compensation    for their
personal services rendered the employer.

      When called upon to construe the word “wages” used in the 1961appropriations
act, Attorney General Opinion WW-1416 (1962) adopted this definition given by
Black’s Law Dictionary 1750 (4th ed. 1951):

           Every form of remuneration payable for a given period to an
           individual for personal services, including salaries, commis-
           sions, vacation pay, dismissal wages, bonuses and reasonable
           value of board, rent, housing, lodging, payments in kind, tips
           and any other similar advantage received from the individ-
           ual’s employer or directly with respect to work for him.

Also see Webster’s New International Dictionary 2568 (3rd ed. 19611. Many cases
supportsuch a broad definition, including the relatively recent case of Prewitt v.
Smith, 528 S.W.2d 893 (Tex. Civ. App. - Austin 1975, no writ), which held a
member’s funds in a public retirement system to constitute compensation or wages
within the constitutional prohibition against garnishment of wages. Tex. Const.
art. 16, S 28.

       Commissions paid employees are considered “wages” within that provision of
the Texas Constitution stating, “[nl o current wages for personal service shall ever
be subject to garnishment.” Tex. Const. art. 16, S 28; Alemite Co. of No. Texas v.
Magnolia Petroleum Co., 50 S.W.2d 369 (Tex. Civ. App. - Fort Worth 1932, no
writ); J. M. Radford Grocery Co. v. McKean, 41 S.W.2d 639 (Tex. Civ. App. - Fort
Worth 1931, no writ). -Cf. Shahan v. Biggs, w   (independent contractor).

      The 1933 Legislature which amended article 5155 is presumed       to have been
aware of the construction so recently placed by the Alemite Co.          and Radford
Grocery courts on the term “wages” with respect to commissions.          See 53 Tex.
Jur.2d, Statutes 5 183 at 276. Yet, it did not abandon or qualify the   term, nor did
the 1957 Legislature do so.

      Commissions earned by traveling salesmen for services rendered their
employers were held “wages” within the 1906 federal Bankruptcy Act, 11U.S.C. 104.
In re Shapiro, 300 F. 566 (E.D. Pa. 1924). And they are “wages” within the Federal
Insurance Contributions Act, 26 U.S.C. 1321 [formerly 26 U.S.C. 14261, as are the
commissions of cab drivers. U.S. v. Fleming, 293 F.2d 953 (5th Cir. 19611;Capital
Life & Health Ins. Co. v. Bowers, 90 F. Supp. 600 (E.D. S.C. 1950).

      The commissions of employed traveling salesmen have been held “wages”
within the meaning of the Texas Workmen’s Compensation Act.            V.T.C.S. art.
5221b-17(u); United States Fidelity & Guaranty Co. v. Lowry, 231 S.W. 818 (Tex.
Civ. App. - Austin 1921, no writ). And although outside salesmen and collectors
paid on a commission basis are among those persons to whom the Texas Minimum
Wages Act of 1970 is expressly made inapplicable, others paid on a commission basis
are apparently covered. V.T.C.S. art. 5159d SS 4(b)(4), 5. The failure of the Texas
Legislature to specifically exclude persons paid on a commission basis from article
5155 coverage seems significant.

                                       p.   4635
Mrs. Mary E. Evins, C.E.C.   -   Page 3    (~-1138)

      In Attorney General Opinion O-6671 (19461, where article 5155, the semimon-
thly pay law, was construed in a different context, the statutory phrase “wages
earned” was said to mean “the agreed or contract price promised by the employer
[to be paid1 to the employee.”     In our opinion, if the agreed or contract price
promised by an employer to be paid periodically for an employee’s personal servioes
includes compensation in the form of commissions, such commissions are “wagesn
within the meaning of article 5155, V.T.C.S.

                                 SUMMARY

           If the agreed or contract price promised by the employer to
           be paid periodically    for an employee’s personal services
           includes compensation     in the form of commissions, such
           commissions are “wages” within the meaning of the semi-
           monthly.pay law, article 5155, V.T.C.S.

                                          Attorney General of Texas

DAVID M. KENDALL, First Assistant

C. ROBERT HEATH, Chairman
OpinionCommittee

jst

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