No Overtime for Certain “Commissioned Employees”

Under the Commissioned Employees Exemption, Cal. Code Regs., T. 8, §11070(3)(D), employers are not required to pay overtime wages to employees “whose earnings exceed one and one half (1 ½) times the minimum wage if more than half of that employee’s compensation represents commissions.” Labor Code §204.1 defines Commission Wages as “compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the amount of value thereof.” That is, the employee must be involved in the selling of a product or service, not making the product or rendering the service. The commissions have to be sufficiently related to the price of services sold or the value of the items sold to constitute a commission for purposes of the exemption. Areso v. CarMax, Inc. (2011) 195 Cal.App.4th 996; Harris v. Investor’s Business Daily, Inc. (2006) 138 Cal.App.4th 28; Keyes Motors, Inc. v. Division of Labor Standards Enforcement (1987) 197 Cal.App.3d 557.