Untitled Texas Attorney General Opinion ( 1978 )

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.
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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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