Inside Sales Workers May Not Be Getting Rest Break Pay They Are Due

Some inside sales workers in California may not be getting the pay they are due for rest periods taken while on the job. Recently, the California Court of Appeals has expanded a law on separate rest break payments.

What are Inside Sales?

Inside sales refers to when products or services are sold via phone or online rather than face-to-face. In retail, inside sales relies heavily on the Internet, emails and phone calls to make contact with customers.

Inside Sales and Rest Break Payments

According to the National Law Review, the California Court of Appeals ruled on a case determining that employees who are only paid on commission must have separate pay for taking rest breaks.

Inside sales and other sales employees who earn their pay solely on commission must not be paid a guaranteed hourly rate as an advance on future commissions earned.

In the recent case, Vaquero v. Stoneledge Furniture, a “minimum pay” of $12.01 per hour, or $480.40 per week was guaranteed for employees. If they did not earn that amount by the end of the week, the inside sales employees were paid a draw from future commissions so they could be brought up to minimum pay for the week.

One employee filed a class action lawsuit claiming that he and other inside sales associates were not being paid correctly under California Labor Code.

The court noted that the Labor Code makes it plain that employers must count rest breaks as “hours worked for which there shall be no deduction of wages.”

The Defendant did not agree. The furniture company argued that the way the law is worded, specifically Wage Order 7, it does not require separate rest break compensation for inside sales and other workers, but that it requires merely compensation for hours worked. Essentially, Stoneledge argued that they paid inside sales and other workers what they were due under the law.

The California Court disagreed. They explained, “[W]hen Stoneledge paid an employee only a commission, that commission did not account for rest periods. When Stoneledge compensated an employee on an hourly basis (including for rest periods), the company took back that compensation in later pay periods.”

Because of this, they determined that when the furniture company paid its inside sales associates in the manner that they did, the advances or draws against future commission were not actually compensation at all.

What Does this Mean for Inside Sales Workers?

Many other inside sales workers in the state of California may not be getting paid lawfully for the work they do. Under California law and because of this new ruling, commissioned employees including inside sales associates must be paid a separate hourly rate for rest periods.

This may include inside sales associates in industries like retail establishments, banks, insurance companies, auto agencies, salons, health clubs and many other companies that utilize inside sales.

If you are an inside sales worker and work for commissions only in California and you have not received separate pay for your rest breaks, you may be entitled to that pay.