Rest Periods for California Commission-Based Employees (the “Decision”)

Background and Details of the Change:

The California Court of Appeals has ruled that commission-based employees must receive compensation for rest periods that is separate from any other compensation received

• Compensation for rest periods cannot be included in:
  • Commissions earned
  • A minimum rate of pay that is deducted from future commissions earned
• Employees must be paid at least the minimum wage for rest periods

This is a class-action case that has been remanded to the trial court. While the plaintiff has been awarded court costs, we do not yet know the extent of any penalties or damages that may be assessed against the defendant.

General Impact to Employers:

California courts previously issued a similar decision regarding piece-rate workers. Rest period pay for commissioned and piece-rate workers should be tracked and paid in the same manner.