Commissioned Salespeople Entitled to Paid Rest Breaks

Commissioned Salespeople Entitled to Paid Rest Breaks

Wage and Hour

An interesting new case published on February 28, 2017 held that commissioned salespeople were entitled to paid rest breaks.  In the case, Vaquero et al v. Stoneledge Furniture LLC, the plaintiffs were commissioned furniture salespeople. If the salespeople failed to earn at least $12.01/hour in commissions, they were paid a draw against future advanced commissions. The draw was then deducted from future commission payments, with the guarantee that the employee would always make at least $12.01 for every hour worked.  The company claimed that it paid all salespeople the base $12.01 per hour for all hours worked, including rest periods, but the plaintiffs alleged they were not paid for the rest periods.

The trial court agreed with the company, but the Court of Appeal reversed the decision, concluding that Wage Order No. 7 required the company to separately compensate employees for their rest periods.  The Court explained, “The plain language of Wage Order No. 7 requires employers to count ‘rest period time’ as ‘hours worked for which there shall be no deduction from wages.’. . . Wage Order No. 7 requires employers to separately compensate employees for rest periods if an employer’s compensation plan does not already include a minimum hourly wage for such time. . . We conclude . . . that Wage Order No. 7 applies equally to commissioned employees, employees paid by piece rate, or any other compensation system that does not separately account for rest breaks and other nonproductive time.”

You can read the full decision here: http://sos.metnews.com/sos.cgi?0317//B269657

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