Legal Rights for California Workers Paid on Commission

Many employees who work on commission do not know their workplace rights. In most cases, employers must provide meal breaks, rest breaks, and business expenses, even when their employees are commission-based. Know your rights, and contact our team at Bisnar Chase for expert legal representation.

Employment Lawyer Ian Silvers: Protecting Your Rights as an Employee

I’m Ian Silvers, a partner and trial lawyer at Bisnar Chase, where I focus on employment law—specifically wage and hour class actions and representative cases. In this blog, I’m focusing on the laws impacting commission-based workers that often fly under the radar, going unnoticed or unreported.

Below, I’ll highlight some frequently overlooked issues for commission-based employees that I’ve encountered in my practice. These oversights can lead to serious legal violations, and understanding them is crucial for protecting workers’ rights.

Who are the Commissioned Employees Addressed Here?

We are looking specifically at workplace violations that impact employees who are paid in part or wholly on commission, who may be deemed “inside sales” employees. To qualify for this exemption, the employee must earn at least 1.5 times the minimum wage based on hours worked, with more than half of their income coming from commissions. This exemption commonly comes up in sales roles, such as car salespeople, who typically earn a percentage of their sales or revenue generated.

It’s important to clarify that I am not addressing “outside salespeople”—those who spend more than half their time away from the employer’s location selling or securing orders. Unlike inside sales employees, outside salespeople are not legally entitled to meal periods, rest breaks, overtime, or even a guaranteed minimum wage.

What Violations Impact Commissioned Workers in California?

Commissioned workers have legally protected rights.

While inside sales employees are exempt from overtime, they are still entitled to meal periods, rest breaks, expense reimbursements, and proper pay. Unfortunately, many mistakenly believe that because they’re paid on commission—and often earn well above minimum wage—they forfeit these protections.

How Does Being Paid By Commission Affect These Workers?

I’ve seen commission employees face a variety of violations, many of which the employees did not realize violated the law. Those include:

1. Not Being Paid At Least Minimum Wage for All Hours Worked: Employers must track and record all hours worked to ensure this occurs.
2. Not Receiving Pay for Rest Breaks/Non-Productive Time (Including Meetings) Separate from and In Addition to Commission Pay: If you are paid completely by commission, your employer must pay you for your rest breaks and other non-productive time separately, as your commission does not account for these times.
3. Not Receiving Compliant Meal Periods and Rest Breaks: You are entitled to timely full 30-minute meal periods and 10-minute compliant rest breaks.  Being paid a commission or being an inside sales employee does not change that.
4. Working Off the Clock: You are entitled to be paid for all your time, including preparing reports, contacting clients, and performing other work outside of your normal work hours.
5. Using an Employee’s Cell Phone, Computer, or Tablet for Work Without Reimbursement: Sales employees often use their own devices to communicate with customers. You are entitled to be reimbursed for this use.
6. Inaccurate Pay Stubs: Your actual hours worked must be listed on your pay stub. However, employers often list a set number of hours (80 if paid every two weeks or 86.67 if paid twice per month), regardless of actual hours worked, which is a violation. The pay stubs also are required to list payment for rest breaks separately, which employers often fail to do.
7. Overtime Pay Owed When Not an Inside Sales Employee: If you do not qualify as an inside sales employee during a pay period, you must be paid for overtime hours worked, even if you qualified in other pay periods.

These are just some of the violations we have seen and dealt with. Please don’t hesitate to contact us for more information if you have experienced another issue.

Your Rights and Remedies

If you are subject to any of the violations above, you may be owed penalties, wages, expense reimbursement, and other compensation.  Many workers don’t realize these violations are happening, but employers must follow the law. Your time—and your rights—matter.

Contact Us

If you think your employer might have violated the law, get in touch with us at Bisnar Chase. We have a dedicated employment law department focusing on workplace violations and employment class actions. We are here to help, and your initial consultation is always free.