California Court Rules Inside Sales Representatives Must Be Given Rest Period Pay

A recent ruling in California courts found that state labor laws mandate that inside sales representative employees receive rest period pay.

This ruling applies to companies that utilize any employees who perform inside sales occupational duties in industries including retail, banks, insurance companies, automobile agencies, salons, and health clubs.

The new compensation rule was announced on Feb. 28, 2017, when the 2nd District California Court of Appeals ruled that inside sales representatives were entitled to separate compensation set aside for rest period pay.

This new law also applies to employees who are already paid minimum wage as an advance on commissions that would be paid during later periods.

In addition, the new ruling allows commissioned employees to be entitled to a 10-minute rest period for every four hours worked, like non-exempt employees.

Since commission based employees, like inside sales representatives, did not originally receive rest period pay, the California court ruled this would change so that these employees could be compensated.

Overview of California Rest Period Pay Rule

It is important to note that the ruling does not compensate California sales representatives for any time spent outside of selling, including time spent in certain meetings and job training.

Furthermore, the court ruled that any deduction from pay due to rest periods was considered unlawful and that commissioned employees were entitled rest period pay. Sales representatives can log their rest periods so that they can be compensated for all hours and duties worked.

Overall, California commission sales employees must be paid for all hours worked and for duties conducted outside of their commission time including: mandatory meetings, paperwork, and other occupational duties performed. In addition, employers must reimburse commissioned sales representatives for all expenses incurred during the job including:

• Telephone Costs
• Postal and Mailing Costs
• Seminar and Training Costs
• Cellphone Costs
• Car Expenses and Gas Costs
• Other Business Expenses or Costs

The State of California Department of Industrial Relations states that “if an employer does not authorize or permit a rest period, the employer shall pay the employee one hour of pay at the employee’s regular rate of pay for each workday that the rest period is not provided.”

Ultimately, employers who now fail to pay inside sales representatives rest period pay for those 10 minute breaks are in violation of California labor laws.