Asian Journal- The Filipino-American Community Newspaper

Q: I WORK for a retail company as a salesperson and I am paid on a commission basis. I spend my work time inside and outside my workplace. I regularly put in 55 to 65 hours of work every week. Am I entitled to overtime pay?

A: Under California law, employees who are paid by commissions are entitled to minimum wages and overtime pay unless they are exempted. The overtime exemption applies if the employee is an executive, administrative, or professional as defined by the law. The exemption also applies if the employee is an outside salesperson.

The term "outside salesperson" is defined to include someone who "customarily and regularly works more than half of the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities."

Outside salespersons are exempted from the state’s minimum wage and overtime requirements. The exemption focuses on the nature of the employee’s duties, the location where they are performed, and how much work time is spent selling.

To determine if an employee is an inside salesperson, an inquiry must be made into the realistic requirements of the employee’s job. The following are considered:

(a) how the employee actually spends his/her time;

(b) whether the employee’s practice diverges from the employer’s realistic expectations;

(c) whether there was any concrete expression of displeasure by the employer over an employee’s substandard performance; and

(d) whether these expressions were realistic given the actual overall requirements of the job.

The foremost consideration, however, is how the employee actually spends her/his time. Moreover, a job description or employer estimate regarding the number of hours an employee should be working in sales-related activities is not controlling.