Salespeople: Your Compensation for Breaks Should be Separate from Commission

posted in: Wage and Hour Violations | 0

There’s no doubt that breaks can be hard to come by in sales – especially when you are working on commission. When you’re constantly looking out for interested clients, delivering pitches, and following up with serious leads, there’s very little time left to grab a bite to eat. Landing a sale often takes priority over taking a quick breather when your income depends on it; it’s understandable. But your employer should be compensating you for that time whether you’re paid solely on commission or not.

 

 

California Rest Break Law for Commission Workers

California’s minimum wage and break laws mandate that employers must separately compensate employees with an extra hour’s pay for rest breaks every day. These rest periods are considered “nonproductive” time and don’t contribute to your commission earnings, which is why they should be treated as a separate payment. This is true for employees who are subject to a draw against commission, as well as for those workers paid commission or piece rate.

If you are a salesperson working in any of the following industries/companies or receive any form of commission, you may be entitled to compensation for unpaid rest breaks:

Mortgage Companies

QuickBridge Funding

Stonegate Mortgage Corp.

Guild Mortgage Company

Retail

Nordstrom

Neiman Marcus Group

Bloomingdales

Car Rental or Buying Agencies

Hertz

Enterprise

Avis

Autonation

Case Study: Former Sales Associates v. Stoneledge Furniture

Sales associates for Stoneledge Furniture, Ricardo Bermudez Vaquero and Robert Schaefer filed a class action lawsuit against the retailer after they were fired. These former employees alleged in the lawsuit that Stoneledge was not abiding by California law because sales associates were not being compensated separately for their rest breaks. Sales associates were paid on a draw against commission plan that allowed them to maintain their $12 hourly rate. If the employee did not earn at least $12 an hour in commission per pay period, Stoneledge provided “future advanced commissions” that would be deducted in another pay period when their total commissions added up to more than $12 per hour worked in that pay period.

According to The Society for Human Resource Management, “Stoneledge claimed that under its compensation plan, all time during rest periods was recorded and paid as time worked. Therefore, sales associates were paid at least $12 an hour even if they made no sales.”

The court disagreed with Stoneledge, finding that commission “advances” did not qualify as compensation for rest periods. Their final conclusion declared, “When 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. In neither situation was the employee separately compensated for rest periods.”

Whether you’re a current or former commission-based employee and you can identify with Ricardo and Robert, you may be owed money.  The Carter Law Firm, a Newport Beach employment law firm, specializes in protecting the rights of people that are victims of these kinds of violations.  If you work in one of these industries, and you feel like you’ve been shorted money?  Fill out this contact form below, and we will reach out to you as soon as possible.

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