California Employers Must Pay Final Commissions and Bonuses to MLOs on the Date Required by Law

California mortgage loan companies must pay final commissions and bonuses to separated MLOs earlier than usual when California law requires it or potentially be liable for penalties. If you have separated from a California employer within the last 4 years, call us today to determine whether your final wages, including commissions and bonuses, were paid on time.

Written by Justin Swidler, Esq.


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When a mortgage loan officer (MLO) concludes their employment, California requires employers to pay MLOs their final commissions and bonuses within 72 hours of separation at the latest (immediately if the employer discharges an MLO), provided that the calculations can be made (Cal. Lab. Code §§ 201(a); 202(a)). Failure to do so may subject employers to liability for up to 30 days’ worth of wages (based on all wages, including commissions). (Cal. Lab. Code § 203(a)).

Despite the legal requirements for early payment of final commissions and bonuses, it is common in the mortgage loan industry to follow the same payment schedule applied during employment for separated MLOs. 

Example: An MLO working for in California resigns without notice on June 24th. According to the commission plan, commissions earned in June are payable at the end of July. The company follows the commission plan instead of California law, which requires it to pay the MLO all earned wages by June 27th, 72 hours after separation. Due to the violation, the company owes the MLO a day’s worth of wages for every day (up to 30) from June 27th to the date it pays the wages. The company pays the MLO’s final wages on July 28th, and therefore the MLO is owed 30 days’ worth of wages, the maximum penalty. The MLO earned an average of $384.00 per day, inclusive of commissions. The company therefore owes the MLO a waiting time penalty of $11,520.00 ($384 per day x 30 days).

If you worked as a mortgage loan officer in California and would like to discuss whether they complied with California law requirements for the payment of your final commissions and bonuses, please contact us today or complete the form below to request a free and confidential consultation. If we determine that you have a valid claim and you choose to proceed, there will be no out-of-pocket costs or fees. Our firm handles cases on a fully contingent basis and will seek reimbursement for fees and costs only from the recovery obtained. If there is no recovery or judgment in your favor, Swartz Swidler, LLC will not seek any fees or costs from you.

Submit Your Information Below for a Free and Confidential Consultation.  You may also call us at 856-685-7420 or email Justin Swidler, Esq. (

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