EXEMPTION FOR INSIDE SALES OR COMMISSIONED SALES EMPLOYEES

Inside Salespeople are exempt from many California wage and hour laws.

This exemption applies to:
All inside salespersons under IWC Wage Order 4 and Wage Order 5.

Type of employee:
Inside Salesperson.

What are they exempt from:
Overtime.

California law requires that in order for an inside salesperson to be exempt from overtime, the employer must prove all of the following elements:

Element Number 1

The employee must work in the retail or service establishment and principally engaged (i.e., spends more than 50% of the working hours) in selling.

Element Number 2

The employee’s regular rate of pay is more than one and one-half times the applicable minimum wage for every hour worked in a workweek in which overtime hours are worked; and

Element Number 3

The employee must earn more than half of the employee’s total earnings are from commissions.

[Rule]

Tips are not considered commissions for the purposes of this exemption.

[Rule]

Commissions must be paid at least as often as semi-monthly or bi-weekly.

[Rule]

Employers cannot average commissions paid in one pay period over other pay periods to satisfy the minimum wage and overtime pay requirement.

What is The Labor Commissioner’s Opinion

Description

DLSE Opinion. Letter No.

Salesperson exemption (Orders 4 and 7)

2002.06.13

Overtime exemption: Commissioned sales (use of draw in computing)

1994.02.07

Overtime exemption: Commissions (“principally”)

1994.06.17-2

CONSULT A LOS ANGELES LABOR LAW ATTORNEY

The Law Offices of Morris Nazarian provides representation to employees seeking the payment of overtime wages, minimum wages, missed meal and rest breaks, vacation wages, deductions from wages, severance pay, misclassification, independent contractor cases and other unpaid wages or commissions. We also handle harassment and discrimination claims.

If you believe you have been misclassified as an exempt employee, contact a Los Angeles wages attorney to schedule a free consultation. Please contact [link: contact us] Los Angeles misclassification attorney Morris Nazarian by calling (310) 284-7333 to make an appointment for a free initial consultation or please fill out the Employment Law Case Evaluation Form and Los Angeles employment lawyer Morris Nazarian will call or email you as soon as possible.

If the violation is company-wide, you and your co-workers may be entitled to bring a class action lawsuit against the employer.

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EXEMPTION FOR INSIDE SALES OR COMMISSIONED SALES EMPLOYEES

What is The Labor Commissioner’s Opinion

CONSULT A LOS ANGELES LABOR LAW ATTORNEY