Inside Sales Job Workers Get Paid Rest Breaks, Says Calif. Appeals Court

Commissioned workers at a California inside sales job are entitled to paid rest breaks, according to a recent decision by a California appeals court.

Plaintiffs in this case claimed their employer Stoneledge Furniture LLC, a California company that operates Ashley Furniture HomeStores, uses a compensation system that fails to provide them the paid rest breaks required by California law.

As compensation for their inside sales job, these employees earn a commission on their furniture sales. If a particular employee’s compensation fails to equate to $12.01 per hour for a given pay period, Stoneledge advances them a “draw” against their future commission to ensure they received at least $12.01 per hour for each hour worked.

The plaintiffs argued this system fails to provide them with compensation during rest break time, as required by California law. Stoneledge countered that its system guarantees employees make the minimum compensation of $12.01 per hour for all time spent at work, including the time they spent on rest breaks.

Piece Workers, Inside Sales Job Workers All Get Paid Rest Breaks

Generally, California law entitles employees to a ten-minute rest break for every work period of four hours or a major fraction thereof. These rest periods are to be “counted as hours worked for which there shall be no deduction from wages.”

On its face, this rule appears written for situations in which the employee is paid hourly. But not all employees are paid that way.

Some employees are paid by the piece – i.e., the number of products produced, miles driven, or customers served. Other employees, such as those working an inside sales job, may be paid by earning a commission based on the amount of sales made.

California courts have said that piece-rate and commission compensation doesn’t compensate employees for rest break time as required by law. Even though these employees are not paid by the hour, employers must provide them with additional compensation for break time.

Court Says Commission Doesn’t Cover Rest Breaks

The appeals court found that the way Stoneledge pays its inside sales job employees was for all practical purposes the same as piece-rate compensation. Both systems prevented the employees from being compensated for rest break time, the court said.

Sections of the California Labor Code that require paid rest breaks for piece-rate workers also apply to commissioned employees, the court said. Wage orders issued by the state Industrial Welfare Commission also apply equally to piece-rate workers and commissioned salespersons, entitling all these workers to paid rest breaks.

The court rejected Stoneledge’s argument that its compensation system covers rest break time.

According to the court, the draws Stoneledge takes against future commissions are not compensation at all. Instead, the court said, they are at best “interest-free loans.” Using these advances to spread compensation around between pay periods does not change the fact that the employee’s compensation is based entirely on commission.

Besides commissioned salespersons, other types of employees may benefit from these California employee protections. Salon workers, insurance representatives, health club employees, and many other types of workers all may work on a piece-rate or compensation basis.

These employees are entitled to protection just like those who make an hourly wage. Failure by their employer to provide rest breaks in accordance with California law may give rise to a legal claim against the employer.

Join a Free California Inside Sales Rest Period Pay Class Action Lawsuit Investigation

If you’re an inside salesperson who works strictly on commission pay, you may have a legal claim if your employer is not paying you additional, separate hourly pay for 10-minute rest periods.

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