Legal Question in Employment Law in California

Re: Resposibility Limits for Commission Only Inside Employees

Your question requires further information in order to be fully answered. An inside sales designation is available only to certain employers under California law and, while broadly available, more information is needed to know whether or not your employer is eligible for this designation.

Secondly, the test for inside sales is whether or not you are paid on a true commission basis for sales. In other words, it cannot be a bonus structure, it must be a true commission based upon the actual sales. (Restricting sales to shipping would be ok.)

Next, your commissions must always be at least 50% or greater of the entirety of the pay you earn. If you are only paid on commissions and receive no other pay, this test does not apply.

Next, the entirety of your pay (commissions and other pay if applicable) must be at least equal to or greater than 1.5 times minimum wage for EACH HOUR worked, during a representative period, i.e., any given month (not just a "bonus" month or an "extra sales during the holidays" type of situation. Thus if you are working 40 hours per week, you must earn at least $405.20 per week or $1620.80 per month (usuing $6.75 p/h for the current minimum wage.)

If you work MORE than 40 hours per week, your employer must track this time and ensure that you are making at least 1.5x's minimum wage for EACH hour worked.

There is no "duties" test under the inside sales commission and your employer can therefore demand that you perform a myriad of duties alongside your sales duties, provided that you meet the minimum renumeration test.

Please feel free to provide further information by email or telephone to more fully determine whether or not you have been properly compensated for your work.

Disclaimer: The materials and content provided at or through this web site or the www.righettilaw.com website are for general informational purposes only and should not be relied on or considered as legal advice. If you seek legal advice or representation by Righetti Wynne PC, you must first enter into a formal agreement. Under no circumstances does this informational response, directly or indirectly, including, without limitation, correspondence by any means to or from Righetti Wynne PC, establish or intend to establish an Attorney-Client relationship between you and Righetti Wynne PC.