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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
Satisfied Customers: 7649
Experience:  Significant experience in all areas of employment law.
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I have been employed as an Inside Sales & Marketing rep for

Resolved Question:

I have been employed as an Inside Sales & Marketing rep for a corp for almost 3 years. In November of 2009 all of the Sales reps were told that we be going on Salary as of January 1st, 2010. We weren't actually put on Salary until April 15th 2010. We all work overtime without being paid every week. My question is, can we all be salaried employees? Even after reading the labor law in California, I'm still not sure if we should be exempt or no-exempt employees.

Thank you
Submitted: 2 years ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 2 years ago.

LegalPro54 :

Hello and thank you for entrusting me to answer your question.

LegalPro54 :

Salaried employees are entitled to overtime unless they fall into one of the few categories of "overtime exempt" employees. Exemptions are provided for certain managerial employees, administrative employees, and professional employees, for example. For more information regarding the exemptions to overtime, read this guide: http://www.las-elc.org/factsheets/exemptions.pdf

ALL salaried employees must receive a salary that amount to twice the minimum wage ($8/hr) for all hours worked.

LegalPro54 :

So, unless an employee falls within one of the few exemptions from overtime and makes a salary twice the minimum wage for all hours worked, he or she would be entitled to overtime for all hours worked in excess of 8 per day or 40 per week.

LegalPro54 :

It is unlikely that a sales rep would fall into one of the exemptions from overtime under California law.

LegalPro54 :

One exception to the above is if half your wages are earned from commissions, your total wages need only equal 1.5 times the minimum wage to remain exempt. You must still fit within one of the exemptions for overtime, however.

LegalPro54 :

I realize that you may still have questions, so please do not hesitate to request clarification.

LegalPro54 :

I will be sporadically online for the remainder of the afternoon.

LegalPro54 :

As I read my answer, let me clarify one thing.

LegalPro54 :

An "inside sales rep" is ITSELF an exempt classification of worker pursuant to California law.

LegalPro54 :

But there are two requires for a worker to be considered such: First, the employee must be involved "principally in selling a product or service."

LegalPro54 :

Second, their compensation must be calculated as a PERCENTAGE of the price of the product or service they are selling” See, e.g. Ramirez v. Yosemite Water Co., 20 Cal. 4th 785, 804 (1999)

LegalPro54 :

If you meet these requirements and make more than 1.5 times the minimum wage for all hours would, an employee in this circumstance WOULD typically be exempt from receiving overtime.

LegalPro54 :

Sorry if any of that was confusing.

LegalPro54 :

Does this adequately address your question?

Customer:

I will read the exemptions sheet and then respond

Customer:

thank you

LegalPro54 :

You are very welcome. Please contact me with your followup questions. Also, please keep in mind that inside marketing sales reps are their own exemption provided they meet the criteria I set forth above.

LegalPro54 :

So the questions to be asking yourself are threefold:

LegalPro54 :

1) are you principally engaged in selling a product or service?

LegalPro54 :

2) Is your wage calculated as a percentage of your sale?

LegalPro54 :

and 3) do your total wages equal more than 1.5 times the minimum wage for all hours worked?

Customer:

Since I became an employee of this company on July 1, 2009, I have been on a salary of $2500 for every 2 week period with no pay increases. I also receive a commission/bonus which I really don't have a good idea of how it is computed as I have never received that computation in writing or verification sheet showing how the money they gave me was computed. This company basically has the premise of, " If you don't like it, quit". Very much a take it or leave it situation, so nobody questions it. We all need to work and make money. My salary isn't computed as a percentage of my sales, it's just the same amount I was earning when this company bought the company I previously worked for.

LegalPro54 :

Thank you for the additional information. It would seem, then, that under the circumstances you describe an individual would NOT be exempt from overtime pursuant to the inside sales rep exemption.

LegalPro54 :

Further, unless an employer in this circumstance required you to keep track of all hours that you actually spent working, it would have no way of knowing with certainty where your wage totaled more than 1.5 times the minimum wage for all hours worked.

LegalPro54 :

It would seem that under the circumstances you describe, a lot of thing things that would be necessary to qualify for the exempt are not present.

Customer:

My real problem is that I'm going to be 62 years old this year and as more people have been fired, the remaining sales staff has been pushed to make even more than we made when we had a larger staff. The stress has caused me to have medical issues which I have had difficulty resolving not the least of which is HBP, an irregular heart beat and MRSA. And now that we have a bare bones staff left to do more work, I have been told that I will be required to do outside sales on occasion which we agreed I would never do when they first took over the company in 2009. Also, if we don't make our quotas, we may be subject to a decreasing salary. What I really need is some leverage so I can quit this job and be able to draw unemployment until I can find a new one. Do I have any legal labor options?

LegalPro54 :

Unfortunately, it is extremely difficult to quit a job and be eligible to receive UE benefits. This is because one of the requirements for UE benefits is that the claimant be unemployed "through no fault of his own." When an individual quits, the EDD usually regards XXXXX XXXXX as "with fault" for the purpose of collecting benefits because the claimant voluntarily became unemployed.

Customer:

We do have to sign in and out each day via an internet time clock. I do sign in when I get to work, sign out and in for lunch and then sign out at the end of the day. Even though my actual hours are from 7AM to 4 PM daily, I normally have to get there between 5:30AM & 6AM to get all my work from the previous day done as well as set up the new day. They have told us that we would not be paid any overtime, but also let us know that we are expected to finish our work in the normal 8 hour day, which is virtually impossible for me. They even suggested that we should work during our lunch hour if we are having problems getting the work done.

Customer:

So do I just hope they fire me or would I have a case to present to the labor board regarding unpaid overtime?

LegalPro54 :

Well, these are two separate issues.

LegalPro54 :

If you were to file a wage claim, your employer would be prohibited from terminated you in retaliation for making the claim.

LegalPro54 :

Based on the facts you have described, a claim may very well exist.

LegalPro54 :

I suggest that you review this summary of circumstances in which an employee can voluntarily quit their job and still receive benefits.

LegalPro54 :

http://www.edd.ca.gov/uibdg/Voluntary_Quit_-_Table_of_Contents.htm

LegalPro54 :

As I previously state though, quitting simply because the work has become much more demanding typically is not adequate justification.

LegalPro54 :

You typically would need to demonstrate that no reasonable person could continue employment under the circumstances and that you have made efforts to keep your job.

LegalPro54 :

I sincerely XXXXX XXXXX this information helps you and I wish you the very best of luck. Bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.

LegalPro54 :

If I have adequately addressed your concerns, please remember to "accept" my answer. If you require further clarification, I will remain available for followup. I want you to be completely satisfied with my answer.

Customer:

I guess I would have to have a heart attack or some other life threatening issue at work before I could get a disability claim going. I am definitely caught between a rock and a hard place. IF I could afford medical insurance with my present medical history, I would quit tomorrow. But, like so many other people in my situation, dying at the desk may be my only option. Am I entitled to a copy of my personnel file from my employer? The home office is located in New Jersey, so going there is out of the question.

LegalPro54 :

California law actually requires that employers allow employees and former employees access to their personnel files and records that relate to the employee’s performance or to any grievance concerning the employee. (Labor Code Section 1198.5) Inspections must be allowed at reasonable times and intervals. To facilitate the inspection, employers must do one of the following: (1) keep a copy of each employee’s personnel records at the place where the employee reports to work, (2) make the personnel records available at the place where the employee reports to work within a reasonable amount of time following the employee’s request, or (3) permit the employee to inspect the records at the location where they are stored with no loss of compensation to the employee.

Customer:

Even though the company said they would not pay any overtime, would I still be able to claim it?

LegalPro54 :

If you are otherwise entitled to it by law, yes.

LegalPro54 :

An employee cannot waive the right to overtime.

Customer:

Does being on salary imply "exempt"status?

LegalPro54 :

Being salary and being exempt from overtime are actually two separate things.

LegalPro54 :

This is one of the many reasons why this area is so complicated.

LegalPro54 :

The fact that you are a salary employee does not on its own dictate whether you have a right to be paid overtime.

LegalPro54 :

You would not be entitled to overtime if you fit into the inside sales rep exemption from overtime.

LegalPro54 :

Otherwise, an employee in this circumstance would be entitled to overtime even though they receive a salary.

LegalPro54 :

That right cannot be waived.

LegalPro54 :

Have I adequately addressed your questions?

Customer:

It seems assumptive on their part that I am exempt. This is part of their bullying tactic. Is the company required to give an accounting of how any commissions.bonuses were calculated?

LegalPro54 :

Yes. An itemization should be included on every paycheck. This is especially so if they are trying to argue that you are exempt pursuant to the inside sales exemption, which requires a showing that your wages are based upon a percentage of sales.

Customer:

I have never had an itemization of that on my paycheck other than the gross amount, taxes and amount paid on my check. Should I have received more information than that?

Customer:

It never showed a percentage of whatever amount they used to calculate it.

LegalPro54 :

Yes. See Labor Code 226.

LegalPro54 :

Does this adequately address your concerns?

Customer:

Does trying to change my position after agreeing not to have any bearing on my situation?

LegalPro54 :

No. an employer is free to change an employee's position and pay rate "at will" absent an agreement to the contrary.

Customer:

So they can't just change because they want to fill another need? I am an "At Will" employee. Does that change anything?

LegalPro54 :

They would be able to change the responsibilities of your position, demote you or terminate you for any reason or no reason pursuant to Labor Code 2922, provided the underlying motivation is not discriminatory or otherwise in violation of CA law.

Customer:

I know you are anxious to get on the... "Super Bowl"? Do I get a copy of this chat?

LegalPro54 :

This chat will remain available to you always.

LegalPro54 :

And I am only mildly interested int he Super Bowl this year. Would have preferred to see the Packers!

Customer:

Thank you for your time. I am having a great deal of stress over this situation and I appreciate your help. I don't how much this will actually help me, but it will get me started in the right direction.

Customer:

Have a good evening. I will accept your answer.

LegalPro54 :

I know that this must all seem quite overwhelming. We are of course limited in what we can do here on Just Answer, but I nonetheless hope that I gave you a good start for figuring this all out.

LegalPro54 :

Thanks so much. Have a pleasant evening and enjoy the Super Bowl.

Patrick, Esq., Lawyer
Satisfied Customers: 7649
Experience: Significant experience in all areas of employment law.
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Patrick, Esq.
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