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Commissioned Salespeople & Overtime, Part 3: Qualified Employer?

By James Peters

Even if you meet the criteria to be classified as “exempt” from overtime pay as a commissioned salesperson, the business your employer is engaged in can also automatically qualify you for overtime, regardless of how you are paid.

Commissioned salespeople can only be “exempt” if their employer is a “retail or service establishment”. Whether your employer qualifies is very complicated and there might not even be a straight answer.

Basically it comes down to the question of whether what your employer sells is often sold at “retail”. This is opposed to “wholesale,” although that does not shed much light on things, either.

The basic test (to which there are many exceptions) is whether the type of product your employer is selling is something sold to the general public, as opposed to other businesses.

One of the best examples from my own experience is a client who sold those self-checkout kiosks you see in grocery stores, Home Depot, etc. This was all his company sold, so this was pretty much a “slam dunk” that his employer was not a “retail or service establishment” and he had overtime claims exceeding $100,000 per year.

An example from the other extreme would be electronics salespeople in stores like Best Buy or Circuit City. These salespeople really only sell to the general public, so their employer clearly is a “retail or service establishment”.

Commissions | Exemptions | Minimum Wage | Overtime | Sales Employees | Wage and Hour

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• "Side Effects" of California's Increased Minimum Wage
• Claims Adjusters and Others Likely Non-Exempt in California

Full post as published by California Employee Rights Blog on January 21, 2007 (boomark / email).