I work in a retail store in California. My coworkers in the appliance departments and I are paid on a strictly commission basis, and the employees in the electronics and tools departments are paid on a base plus commission basis. The store has somewhat recently begun abusing the words "miscellaneous duties" which they say appear in our job descriptions to justify using the commissioned salespeople to perform tasks that should logically be assigned to other employees, who are paid an hourly wage. The following are examples of such.

For an opening shift, on most days the opener would be asked to come in 15 minutes before the store opens to open the registers and prepare the department for the day. On days where there is a new ad (new pricing/promotions), opening employees are required to come in an hour before the store opens to put up new tags and signs. The store employs a team which is dedicated to the removal of old tags/signs and the setup of new ones, and the only departments that they skip are those in which the employees are paid strictly commission.

For a closing shift, one or more closing employees from each commission department are required to stay after store hours for 15-30 minutes minimum per day to clean up other departments. We are expected to (and do) maintain our own departments during regular store hours. For example, associates from tools, appliances, and electronics will often be made to clean up footwear, women's, bedding, etc..

When this policy was first implemented, several of the commissioned salespeople who felt it to be unfair simply left when the store closed rather than stay and work for free (or for below minimum wage in the case of the base plus commission employees). Rather than disciplining those employees who left early, the management began simply locking all the doors at the time the store closed. The single door by which employees are normally permitted to enter or exit has a sign posted above it which reads "This door must remain unlocked while building is occupied", but is frequently locked to prevent employees from leaving. If an employee asks a manager to be permitted to leave, the usual response is "what time are you scheduled off?", or similar. Employees who have contested that locking all the exits violates fire safety codes have been told that the doors can simply be "pushed out" in case of a fire. It's a heavy sliding glass door locked with a deadbolt.

Employees are also frequently told to perform non-sales tasks during store hours, which in many cases prevent the possibility of sales occurring for those employees. For example, commissioned salespeople are frequently told during store hours to go clean other departments, especially if customer traffic is low for the day. The problem (beyond simply more unpaid labor) is that there is no line of sight from most of the other departments to the departments in which we are supposed to be selling in order to earn a wage, meaning that if a customer does come, we would have no way of knowing they were there.

In another example, recently the store was having the tile floors waxed, which meant that all of the refrigerators, freezers, washers, dryers, water heaters, water softeners, and display fixtures had to be moved from their respective departments to other departments which had carpeted floors. Rather than having the warehouse employees (who are trained to safely move heavy appliances) perform the move, commissioned salespeople were told to do it. This not only interfered severely with sales, but was unsafe. The following morning, one employee from each of the two appliance departments was made to come in two hours before the store opened (out of shifts lasting four hours total) and move everything back on their own. "Miscellaneous duties".

My question is basically this: how much of what they are doing is legal/illegal?

I also have a separate question for a separate issue. The store has a meeting at 7:30 in the morning every Saturday, ostensibly to provide training on the store's extended warranties, which any employees who did meet their assigned goal for extended warranty sales in the prior month are required to attend. A very significant portion of the store's sales employees fall under this category. My question is in regards to the pay which is required for such a meeting. The meetings last for one hour, and we are currently given one hour of "training pay" (minimum wage) for each meeting we attend. Occasionally an employee would have to attend a meeting on a Saturday where he or she did not otherwise work, but for the most part employees attending the meetings would also have a regular shift later in the day, with separation between the end of the meeting and the beginning of the shift.

Under those circumstances, what would be the correct pay for:
Somebody who attends the meeting and is not otherwise working that day?
Somebody who attends the meeting and is working later in the day?

To anybody who takes the time to read and respond, thank you very much for your time. If anybody would be able to point me in the direction of any labor laws regarding commissioned employees performing work which precludes any possibility of sales, it would be tremendously appreciated.

It is not legally possible for employees who work in a store to be paid on a 100% commission that completely ignores hours actually worked. The only class of employees for which this can legally be done are Outside Sales. (http://www.dol.gov/esa/whd/regs/compliance/fairpay/fs17f_outsidesales.htm) Generally speaking employees working for stores (inside sales) must be paid at least MW (and OT if applicable) for hours actually worked. There is also something called the Retail and Service establishment exceptions (http://www.dol.gov/esa/whd/regs/compliance/whdfs20.pdf) which does not so eliminate the overtime rules as alter them.

The meeting and training rules are shown below but it is legally difficult to not treat training as hours worked. The "law" on this issue are the following federal DOL regulations.

29 CFR 785.27 - General.
Attendance at lectures, meetings, training programs and similar activities need not be counted as working time if the following four criteria are met:
(a) Attendance is outside of the employee's regular working hours;
(b) Attendance is in fact voluntary;
(c) The course, lecture, or meeting is not directly related to the employee's job; and
(d) The employee does not perform any productive work during such attendance.

29 CFR 785.28 - Involuntary attendance.
Attendance is not voluntary, of course, if it is required by the employer. It is not voluntary in fact if the employee is given to understand or led to believe that his present working conditions or the continuance of his employment would be adversely affected by nonattendance.

785.29 Training directly related to employee's job.
The training is directly related to the employee's job if it is designed to make the employee handle his job more effectively as distinguished from training him for another job, or to a new or additional skill. For example, a stenographer who is given a course in stenography is engaged in an activity to make her a better stenographer.
Time spent in such a course given by the employer or under his auspices is hours worked. However, if the stenographer takes a course in bookkeeping, it may not be directly related to her job. Thus, the time she spends voluntarily in taking such a bookkeeping course, outside of regular working hours, need not be counted as working time. Where a training course is instituted for the bona fide purpose of preparing for advancement through upgrading the employee to a higher skill, and is not intended to make the employee more efficient in his present job, the training is not considered directly related to the employee's job even though the course incidentally improves his skill in doing his regular work.

I very much appreciate you taking the time to respond. That being said, I'm afraid I didn't really get the answers that I needed. It's entirely possible that I'm just not fully understanding the connection you're making. The situation has nothing to do with overtime pay, although the information you provided is good to know for future reference.

The problem is not the number of hours which employees are working, it's that employees are being made to work during times when there is no possibility for compensation (before or after store hours), or to perform tasks which prevent us from making sales during store hours. For example, coming in from 8:00 AM to 12:00 PM to move appliances for no pay other than your commissions, when the store doesn't open until 10:00 AM. Is it in fact legal to force commissioned employees to work "for commission" during times where it is impossible to make a sale? If it is legal, what are the limitations? Can my coworkers and I be told to go clean other departments when the store isn't busy, losing any possibility of profit? What about the restrooms? Where is the line? Can we be told to work without any hourly pay when the store is closed at all? Fifteen minutes? Two hours?

Secondly, when the store has a meeting which is mandatory for employees meeting a certain criterion (in this case failure to sell enough extended warranties), what is the minimum amount of pay owed to the employees who attend? If you come in at 7:30, leave at 8:30, and come back again at 12:30, should you be paid for one hour for the meeting, or two? If you come in for the meeting and do not otherwise work that day, should you be paid for only one hour? Two? Four?

Thank you again to any who take time to respond, I'm very eager to find out where the law stands on these issues.

As far as making you work before or after your scheduled shift, it is legal. They may owe OT as explained in DAW's post, but it is legal to require you to work.

As for your other questions, it is legal to make the sales folks move the merchandise. It may not be smart, but no law requires only those working in the warehouse to move merchandise.


Locking the exterior doors at the time of closing is legal. Surely you don't think all the doors should be left open after closing. What would prevent others from entering who should not? Surely all the doors can't be glass sliding ones with deadbolts. It is also legal for the manager at the to ask about the shift.

Hello.

1. There is nothing per se illegal about assigning duties which are different from expected / previously assigned.

2. There is nothing illegal about being 100% commission based employee (most or almost all real estate agents are).

3. Coming in early and leaving late without being compensated for it is a violation that many major companies have been hit for (including ATT that required their reps to come in 15 min early to start their computers).
Unless you fall under one of the enumerated exemptions, this time shall be compensable.

4. Mandatory, work related meetings must be compensable.

You might find this brief article useful as well:
http://www.sanfranciscoemploymentlawfirm.com/sanfrancisco-employment-lawyer/2008/8/4/overtime-and-commission-based-wages-in-california.html

As far as making you work before or after your scheduled shift, it is legal. They may owe OT as explained in DAW's post, but it is legal to require you to work.

The issue is not working longer than originally scheduled. The issue is the fact that there is no pay whatsoever for any work done before or after store hours. If one is being "paid on commission", doesn't there have to exist the possibility to make sales?

As for your other questions, it is legal to make the sales folks move the merchandise. It may not be smart, but no law requires only those working in the warehouse to move merchandise.

The other employees and I really don't have any issue with being told to move the merchandise. What is bothersome is the fact that once again, we received no pay whatsoever for doing so. I can understand being asked to do tasks required to keep up the department, such as cleaning, tagging, and so on, during your normal hours. Doing these tasks does not prevent you from making sales (and therefore getting paid) when customers do come in. Being told to go clean up a department on the complete opposite side of the store means that there is no longer any possibility for me to make money.

Locking the exterior doors at the time of closing is legal. Surely you don't think all the doors should be left open after closing. What would prevent others from entering who should not? Surely all the doors can't be glass sliding ones with deadbolts.

No, not all of the doors are sliding glass with deadbolts. One of the three is sliding glass with a deadbolt, one is sliding glass with a deadbolt covered by a huge metal grate which slides down over it, and the other at the mall entrance is just a huge metal grate. The ones with the metal grates require a key to operate the electronic controls which lift the gates. The one which is simply a sliding glass door is supposed to remain unlocked while the building is occupied, as evidenced by the sign above it which clearly states "THIS DOOR MUST REMAIN UNLOCKED WHILE BUILDING IS OCCUPIED". I have already been told by a local police officer that this is a fire code violation, though it's possible he was mistaken. Naturally they would lock the doors as the last person leaves the building the same way most other businesses do, but they only began locking them early to prevent employees from leaving.

It is also legal for the manager at the to ask about the shift.

Naturally. However, they will not unlock the door for an employee who wishes to leave before they are scheduled. I understand that they have every right to discipline employees who leave earlier than scheduled, but that doesn't include locking them up. There have also been cases where employees who were in fact scheduled to go home at the time of the store's closing, but were unable to leave exactly on time, were made to wait until everybody else was finished so they could unlock the doors. They have never locked the doors at the time of closing to keep people out, they started doing it to keep employees in the store against their will.

The fire code is public policy complain to the fire Marshall, if they terminate you for that it could give rise to a wrongful termination suite violation of public policy,and whistle blower laws.
JoeC

Hello.

1. There is nothing per se illegal about assigning duties which are different from expected / previously assigned.

As in my response to ElleMD, we take no issue with being asked to perform other tasks. Fact is, it often makes for a nice diversion. Or at least it would, if we were getting paid for it. My coworkers and I would clean up the other departments, move all the appliances out and back, take down and set up our signs, and do it all with smiles on our faces if only we weren't doing it for no pay. What if they tell me to clean up the automotive department? An automotive customer's car? A manager's car? Keep in mind that my pay is based around selling appliances. Forgive the hyperbole, but again, where is the line?

2. There is nothing illegal about being 100% commission based employee (most or almost all real estate agents are).

100% commission based sales is exactly what I signed up for. However, when the only thing that I get paid to do is sell, I expect my duties not to interfere with my ability to sell.

3. Coming in early and leaving late without being compensated for it is a violation that many major companies have been hit for (including ATT that required their reps to come in 15 min early to start their computers).
Unless you fall under one of the enumerated exemptions, this time shall be compensable.

Thank you very much for this information. It does seem however that the call center employees were paid by the hour and were simply not clocked in while not logged into their phones. In my case, employees are not "working off the clock", we are "working on the clock" for no wage, so I'm not completely sure (though I certainly hope) that the same rules apply.

4. Mandatory, work related meetings must be compensable.

This I know, but the question is in regards to the amount of compensation due. Quoted from the Division of Labor Standards Enforcement Policies and Interpretations Manual:

1. Required meeting is scheduled for a day when the worker is not usually
scheduled to work. The employer tells all of the workers that attendance at the meeting is mandatory and a one- or two-hour shift is “scheduled” for this meeting. For those workers not “regularly scheduled” to work, the employee
must be paid at least one-half of that employee’s usual or scheduled day’s work.
2. Required meeting is scheduled on the day a worker is scheduled to work, but after the worker’s scheduled shift ends.
a. If there is an unpaid hiatus between the end of the shift and the meeting, the employee must be paid, pursuant to Section 5(B) (see above) at least two hours for reporting a second time in one day.
b. If the meeting is scheduled to immediately follow the scheduled shift, there
is no requirement for the payment of reporting time no matter how long the
meeting continues.

Bolded text mine, added for emphasis. I am trying to find out for certain if these policies apply to the situation I described.

I suspect you fall under the Section 7(i) exemption that DAW linked (retail and service establishments).

So the question would be, is your employer meeting the two requirements:
(1) total pay for the week divided by # hours worked must be more than 1 1/2 times minimum wage for each hour worked. (Basically paying minimum OT for every hour worked) They must count the hours you are doing noncommissionable work in this calculation.
(2) for a representative period, take your commission and divide it by total pay -- commissions must be more than 50% of your pay for that period (since you are 100% commission, you automatically pass this one).....

If they are meeting those two requirements, then yes, they can keep you late doing non-commissionable duties.

I understand this exemption, but it has (as far as I can tell, correct me if I'm wrong) nothing to do with what I'm talking about. We're not working overtime. I'm talking about (for example) a four hour shift where the store is closed for the first two hours of it. A three hour shift where the store is closed for the last half hour. Total hours worked for the day less than eight, total hours worked for the week less than 40.

Here's an example of the problem. Employee "A" comes in to work from 5:00 to close (9:00) and sells $850 worth of merchandise. His commission for this is (for example) $34. His wage for the four hour shift comes to $8.50 per hour, just above the minimum.

Employee "B" comes in to work from 5:00 to 9:30, sells $850 worth of merchandise, and spends a half hour cleaning the shoe department. His commission is also $34. His earnings for the 4.5 hour shift come to $7.56 per hour, which is below the minimum. This means that employee "B" has to go "on draw pay" to be brought up to minimum wage, which has to be paid back later on out of your commissions, for no net gain for the extra hours worked. Being on draw pay has a negative impact on your job security. Working hours in which you are unable to sell also lowers your your average hourly pay, which is used to calculate vacation pay.

The next day, employee "B" comes in two hours before the store opens and works for four total hours. The day after that, another 30 minutes after the store closes. Then 15 minutes early to open the registers. Then an hour early to set up the new ad. By the end of the week, four hours and fifteen minutes of work have been done for no gain whatsoever, out of a total of about 16-20 hours.

Honestly, I do understand what you are saying and yes, it does sound "unfair".

But what I, and others, are trying to tell you is that it is not illegal unless you aren't getting paid minimum wage (which for the 7i exemption is higher than regular minimum wage and is 1 1/2 times minimum regardless of actual overtime hours) for the exemption for all hours worked. Whether they can subtract that out of future commissions through a draw is another question.

But there is no law that states the employer cannot require you to perform non-commissionable duties. The only law that matters is whether you are being paid correctly for the hours you are required to work.

If the employer is NOT claiming the 7(i) exemption, then honestly as long as you are making minimum wage for the 1st 40 hours and minimum wage * 1 1/2 for overtime hours, it is legal to require you to perform just about any duties. 7(i) just gets you higher minimum pay for the first 40 hours.

If you do not like the requirements or feel like you aren't making enough commission, then I suggest looking for work elsewhere.

Agreed. Also the phrase "100% commission" is legally meaningless to someone who works Inside Sales because if you do not make a single dollar in sales or earn a single dime in commissions, then the employer is still legally required to keep track of hours worked and pay at least minimum wage (more if the 7(i) rules are in play). And as was said, the employer can legally make you do nothing but work that you could not possible make a sale on, like say resurface the parking lot if they wanted to.

Thank you again for your replies. Could you further elaborate on the effects of claiming the 7i exemption status as pertaining to non-overtime hours? I know from speaking with other employees who have been there longer that the store has never paid its commissioned employees overtime pay, which I can only assume means that they DO claim 7i exemption status. If this is the case, are they obligated to pay 1.5 X minimum wage regardless of overtime? Or am I misunderstanding?

Many, if not most of my fellow employees and I are in fact looking for work elsewhere, but the job market has never been exactly strong where we live. What I wanted to find out was mainly whether or not we were owed back pay for our hours worked.

I apologize for being repetitive and misunderstanding what you were telling me. I had (and still have) a hard time believing that everything they're doing could really be legal, and as I am completely new to this forum I'm not familiar with each poster's level of expertise.

Retail employers are not required to follow the 7(i) rules. However, if retail employers choose to not follow the 7(i) rules then they must follow the normal rules. The 7(i) rules are specifically written in such a way that failure to follow the 7(i) rules causes the "normal" rules to kick in. The 7(i) rules are spelled out in the fact sheet I referenced earlier. The key is that employees who sell stuff in retail stores are legally Non-Exempt (normally subject to the overtime rules). The 7(i) exception does not make overtime go away as much as it does make it easier to make a signficant amount of the total compensation based on commission without driving everyone crazy on the overtime recalculations. Employees paid under the 7(i) rules get paid minimum wage up front, with a commission payment later at least large enough to cover the 7(i) requirements.

Past that, start keeping track of actual hours worked from this point on. Do it at home. Do not use company equipment to do this. Estimate prior hours worked that you do not have hard numbers for. Try to match up pay period earnings against the hours worked. An Excel worksheet is good, particular if you make a different column for the two different sets of rules. Legally each workweek stands alone and you want to document every workweek in which the employer failed to follow one of the rule sets (normal vs. 7(i)).

If you change jobs, then you have no reason to not file a wage claim with CA-DLSE on your way out the door. It works or it does not, but costs you nothing to try. Alternatively since you have a number of unhappy employees in the same boat, you might want to (collectively) talk to a lawyer. However, the lawyer is going to want exactly the same earnings/hour worksheet I mentioned already, so I would be inclined to get that done first.

It is not legally possible for employees who work in a store to be paid on a 100% commission that completely ignores hours actually worked.

If you work 6 hours and only make $20 in commissions, your employer has to pay (not out of a draw) but PAY you $28 ($8 MW x 6 hours - $20 commission = $28) to bring you to the minimum wage (MW).

You can be paid on commsission and be exempt from (MW) and overtime (OT) IF AND ONLY IF you are paid at least $12 an hour (1.5x Ca. MW of $8 per hour) and at least half of your pay is from commssions. Otherwise the employer must pay at least MW and OT for all hours worked.

Regarding your examples above:

Employee A is fine because A is getting at least the MW. If A goes over 40 hours in the week, A would have to be paid OT for any hours over 40 because A's hourly rate is not 1.5x the MW even though more than 50% of A's pay is from commissions.

Employee B is going to give the employer trouble. Since B is not making MW the employer must pay the difference to bring B up to at least the MW. This cannot be from a draw because, as you stated, B will never actually get paid for those hours.

Regardless, do exactly what DAW suggested. Keep careful track of your hours and either file wage claim or consult an attorney.

Thanks again to everyone responding, it is very appreciated.

MilCivHR, are you saying that the idea of draw pay is, in and of itself, illegal? Or only under specific circumstances? If the latter, could you please specify what, specifically, would disallow draw pay in this instance?

There is a class of employees called Outside Sales (mentioned earlier). These employees are not subject to minimum wage or overtime restrictions. These employees are traditionally paid on a commission only basis. These are the types of employees that "draws" are traditionally associated with precisely because there are no MW or OT restrictions. A "draw" is traditionally a conditional wage payment based on anticipated commissions that is legally required to be paid back if certain conditions are not met.

You are an Inside Sales person. You are subject to either the "normal" MW and OT rules, or the FLSA 7(i) rules. Period. Your employer can call payments they make to you "draws" or anything else they want to, but calling the payment a draw does not make the MW or OT legal requirements somehow go away. There are no magic words in labor law.

Now, if the employer makes payments in excess of MW/OT requirements and they have someone who knows what they are doing write the contracts, and they do not step into any of CA's more-then-federal state laws, then it is in theory possible to have the portion of the draw (if any) in excess of the MW/OT requirements treated as a conditional wage payment (a.k.a draw) subject to repayment. Pointless, but theoretically possible.

Alternatively, the employer could just do whatever every one else does, and pay exactly the amount the law requires up front (or partially later under 7(i) rules), and handle any additional payments only if/when commissions justify it. Arguably "draws" make no sense outside of the Outside Sales context.