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Do employers in California have to pay sales people at least minimum wage for hours worked and for overtime?

Glendale, CA |

If a salesperson doesn't make enough to break the minimum wage rate do they still get paid at least minimum wage? Is it legal for a company to not pay for any overtime hours since it is a commission based job and can they only pay an employee for 40 hours a week even though 48-54 are worked?

I have a situation at a car dealership where the sales people who don't sell enough cars only get paid minimum wage for 40 hours a week even though they are required to be present for at least 48 hours a week. What do you think?

Attorney Answers 2


  1. Commission and salary employees do not get paid overtime unless they are scheduled to be available for 40 hrs a week or 8 hours a day . If they have quotas or other duties that have to be done over 40 hrs regardless then there might be a claim they are violating labor laws. It depends on so many facts.

    This is just my opinion and not a comprehensive answer. You assume the risk because this answer may not apply to your situation depending on the facts.


  2. Under California law, non-exempt employees must be paid at least minimum wage ($8.00/ hour) for all straight-time hours worked, and at least time-and-a-half ($12.00/hour) for all hours worked above 8 in a day or 40 in a week. If you are indeed "required to be present," 48 hours a week, then you are subject to the control of your employer, and that time counts as hours worked.

    Although employers are permitted to treat commissioned employees as "exempt" in certain circumstances, and thus avoid paying overtime, that does not appear to apply to your situation. Under the IWC Wage Orders, An inside salesperson is only exempt if his or her total compensation exceeds 1.5 times the minimum wage for each hour worked during the pay period ($12.00/hour) AND at least 50% of total compensation must come from commissions. By virtue of your asking this question in the first place, it would assume that you do not meet these criteria, and therefore you must be compensated for all hours in which you are subject to the control of your employer.

    Further discussion of the inside sales exemption can be found here: http://www.californiawagelaw.com/wage_law/2005/01/it_is_common_kn.html

    Good luck!

    Disclaimer: This reply does not constitute legal advice or the establishment of an attorney-client relationship, and constitutes only general guidance based on the limited information provided, and may not take into account additional relevant facts and circumstances pertaining to your specific situation.

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