This exemption applies to “Retail Industry” employees (IWC Wage Order 7) and employees in “Professional, Technical or Clerical Occupations” not covered by a different Wage Order (Wage Order 4).
Overtime pay requirements do not apply to any employee whose earnings exceed one and one-half times the minimum wage if more than half of that employee’s compensation represents commissions. More than half of the employee’s compensation in each pay period must come from commissions (overtime must be paid for each week that does not meet this criteria). To constitute “commission” wages, the employee must be involved principally in sales activities and his or her compensation must be a percentage of the price of the product or service.
This is a complicated area of law. It involves the following components: