California Wage Ruling Guarantees Rest Periods for Inside Sales Employees

The California Court of Appeal recently issued its decision regarding compensation for rest periods for inside sales representatives. On Feb. 28, 2017, the California Court of Appeal offered its opinion for the case of Vaquero v. Stoneledge Furniture LLC with regard to employers who pay hourly wage to commission-based employees but do not compensate for the employees’ rest periods.

The lawsuit was filed by two employees, alleging their employees denied them compensation for rest periods and did not pay for all hours worked. The employer filed for summary judgment arguing “the rest period claim failed as a matter of law because Stoneledge paid its sales associates a guaranteed minimum for all hours worked, including rest periods.”

The trial court had reportedly granted the employer’s motion, stating that under the company’s system that there was no possibility that the rest periods would not have been recorded. The employees then appealed the decision, with the California Court of Appeal reversing the trial’s court decision.

The Appeal Court argued that there should be no deductions from rest periods for inside sales employees, and that pay for all hours worked should be guaranteed. This lawsuit had guaranteed that commission California employees will be compensated for rest periods, which includes employees who are guaranteed an hourly pay rate.

Overview of Rest Periods for Inside Sales Employees Ruling

According to the lawsuit, the employer had clocked all hours worked and paid sales associates at an hourly rate but that rest periods were not paid. In addition, if an employee failed to earn the minimum commission amount at $12.01 per hour in commission pay, the employees was paid a “draw” against future commissions.

The commission agreement states that “the amount of the draw will be deducted from future Advanced Commissions, but an employee will always receive at least $12.01 per hour for every hour worked.”

This essentially means that if hourly sales employees do not earn enough commission in the week, the employer will deduct from future paychecks and the deductions often come from rest periods for inside sales employees.

In addition, the commission agreement does not guarantee that rest periods for inside sales employees will be compensated along with any activities that do not involve making sales. Even though employees can clock out for meal breaks, they cannot do so for rest periods.

Overall, employers who do not separately compensate their sales employees for rest periods may be found in violation of state law. Potential claimants should contact a specialized lawyer to determine eligibility for a CA rest period lawsuit.