Filed 3/20/17 (unmodified opn. attached)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

RICARDO BERMUDEZ VAQUERO 

et al.,

Plaintiffs and Appellants,

v.

STONELEDGE FURNITURE LLC,

Defendant and Respondent.

 B269657

 (Los Angeles County

 Super. Ct. No. BC522676)

ORDER MODIFYING OPINION;

NO CHANGE IN JUDGMENT

The opinion filed February 28, 2017 and certified for 

publication is modified as follows:

1. On page 14, in the first paragraph, after the first full 

sentence ending with the words “minimum hourly wage for such 

time,” add as footnote 8 the following, which will require 

renumbering subsequent footnotes:

8 This case does not involve, and we have no 

occasion to question, the propriety of compensation 

plans that pay non-exempt employees a salary that 

compensates them for rest periods and other nonproductive work time.
2. On page 15, in the second sentence of the first full 

paragraph, on lines 7 and 8, the words “separately account” are 

deleted and replaced with the words “provide compensation.” As 

modified, the sentence reads:

We conclude, however, that Wage Order No. 7 

applies equally to commissioned employees, employees 

paid by piece rate, or any other compensation system 

that does not provide compensation for rest breaks and 

other nonproductive time.

This order does not change the judgment. 

PERLUSS, P. J. SEGAL, J. KEENY, J. (Assigned) 
Filed 2/28/17 (unmodified version)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

RICARDO BERMUDEZ VAQUERO 

et al.,

Plaintiffs and Appellants,

v.

STONELEDGE FURNITURE LLC,

Defendant and Respondent.

 B269657

 (Los Angeles County

 Super. Ct. No. BC522676)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, Elihu Berle, Judge. Reversed and remanded

with directions.

Cohelan Khoury & Singer, Michael D. Singer, Jeff Geraci; 

Law Offices of Raphael A. Katri, Raphael A. Katri; Law Offices of 

Kevin T. Barnes, Kevin T. Barnes and Gregg Lander for 

Plaintiffs and Appellants.

Littler Mendelson, J. Kevin Lilly and Scott M. Lidman for 

Defendant and Respondent.
2

INTRODUCTION

Are employees paid on commission entitled to separate 

compensation for rest periods mandated by state law? If so, do 

employers who keep track of hours worked, including rest 

periods, violate this requirement by paying employees a 

guaranteed minimum hourly rate as an advance on commissions 

earned in later pay periods? We answer both questions in the 

affirmative, and reverse the trial court‟s ruling granting 

summary judgment in favor of the employer.

FACTUAL AND PROCEDURAL BACKGROUND

Ricardo Bermudez Vaquero and Robert Schaefer worked as 

Sales Associates for Stoneledge Furniture, LLC, a retail furniture 

company doing business in California as Ashley Furniture 

HomeStores. After termination of their employment, Vaquero 

and Schaefer filed a class action complaint alleging that 

Stoneledge‟s commission pay plan did not comply with California 

law. The parties largely agree on the relevant facts regarding 

Stoneledge‟s employee compensation system. 

A. Stoneledge’s Compensation System

From 2009 through March 29, 2014 Stoneledge 

compensated Sales Associates pursuant to the Sales Associate 

Commission Compensation Pay Agreement. After a training 

period during which new employees received $12.01 per hour, 

Stoneledge paid sales associates on a commission basis. If a sales 

associate failed to earn “Minimum Pay” of at least $12.01 per 

hour in commissions in any pay period, Stoneledge paid the 
3

associate a “draw” against “future Advanced Commissions.” The 

commission agreement explained: “The amount of the draw will 

be deducted from future Advanced Commissions, but an 

employee will always receive at least $12.01 per hour for every 

hour worked.” The commission agreement included a table 

providing an example of how the draw and Advanced 

Commissions system worked, assuming 40 hours of “nonTraining Time” in a work week:

Week # Min. 

Weekly Pay

Weekly Advanced 

Commission

Gross 

Pay

Week Draw 

(Owe)

Cumulative 

Draw (Owe)

1 $480.40 $300 $480.40 $180.40 $180.40

2 $480.40 $400 $480.40 $80.40 $260.80

3 $480.40 $550 $480.40 -$69.60 $191.20

4 $480.40 $800 (-$191.20 draw) $608.80 $0 $0

5 $480.40 $750 $750 $0 $0

The commission agreement did not provide separate 

compensation for any non-selling time, such as time spent in 

meetings, on certain types of training, and during rest periods. 

Sales associates recorded this time, however, using Stoneledge‟s 

electronic timekeeping system. Sales associates clocked into the 

system at the start of each shift, clocked out and back in for meal 

periods, and clocked out again when their shifts ended. Sales 

associates did not clock out for rest periods. Stoneledge 

authorized and permitted sales associates to take rest periods of 

at least 10 consecutive minutes for every four hours worked or 

major fraction thereof. 

Stoneledge contends that under its compensation plan “all 

time during rest periods was recorded and paid as time worked 

identically with all other work time. . . . [¶¶] Thus, Sales 

Associates are paid at least $12 per hour even if they make no 

sales at all.” Although Stoneledge deducted from sales associates‟
4

paychecks any previously paid draw on commissions, Stoneledge 

states such “repayment [was] never taken if it would result in 

payment of less than the [Minimum Pay of $12.01 per hour] for 

. . . all time worked in any week.”

Effective March 30, 2014, Stoneledge implemented a new 

commission agreement that pays sales associates a base hourly 

wage of $10 “for all hours worked.” In addition, sales associates 

can earn various types of incentive payments based on a 

percentage of sales. Under the new agreement, no portion of a

sales associate‟s base pay is deducted from or credited against 

incentive payments. 

B. The Litigation

Vaquero and Schaefer filed a putative class action alleging 

causes of action for failure to provide paid rest periods under 

Labor Code section 226.71 and the applicable wage order, failure

to pay all wages owed upon termination under section 203, unfair 

business practices, and declaratory relief.2 Pursuant to the 

parties‟ stipulation, the trial court certified a class comprised of 

three subclasses of sales associates corresponding to the 

plaintiffs‟ three primary claims: unpaid rest periods, unpaid 

wages upon termination, and unfair business practices. The class 

is limited to sales associates employed by Stoneledge in 

 

1 Undesignated statutory references are to the Labor Code. 

2 The plaintiffs previously filed an action in state court 

claiming Stoneledge‟s compensation plan violated California‟s 

wage and hour laws, which Stoneledge removed to federal court. 

(See Vaquero v. Ashley Furniture Industries, Inc. (9th Cir. 2016) 

824 F.3d 1150, 1152.)
5

California from September 30, 2009 through March 29, 2014, the 

time period during which the previous commission agreement 

was in effect. 

Stoneledge filed a motion for summary judgment or in the 

alternative for adjudication, arguing that the rest period claim 

failed as a matter of law because Stoneledge paid its sales 

associates a guaranteed minimum for all hours worked, including 

rest periods. With respect to the claim for violation of section 

203, Stoneledge argued a claim for rest period “premium pay” is 

not an action to recover “wages” under section 203 and, in any 

event, Stoneledge did not “willfully” fail to pay wages, as required 

for a violation of section 203. Stoneledge argued that, because 

the class claims for failure to pay for rest periods and for wages 

owed at termination failed as a matter of law, the derivative 

claim for unfair business practices also failed.

The trial court granted Stoneledge‟s motion and entered 

judgment for Stoneledge. The court found “Stoneledge‟s payment 

system specifically accounted for all hours worked . . . and 

guaranteed that [sales associates] would be paid more than the 

$12 an hour for those hours. With this system there was no 

possibility that the employees‟ rest period time would not be 

captured in the total amount paid each pay period.” The court 

stated, “By tracking all the hours that its sales associates and 

employees were present at the facility, including rest periods, 

Stoneledge was able to ensure that the compensation it paid its 

employees via commission would never fail to include payment 

for the time employees spent taking their mandatory rest 

periods. [¶¶] Under Stoneledge‟s plan . . . sales associates are 

uniformly paid at or above a rate which expressly encompasses 

all the time present in the workplace and all the time worked, 
6

including rest periods.” The court therefore granted Stoneledge‟s 

motion for summary adjudication on the cause of action for 

violation of section 226.7. 

The trial court, without examining the merits of the 

remaining claims, concluded they all failed because they were 

derivative of the rest period claim. The court stated, “With 

regard to the . . . causes of action for violation of Labor Code 

section 203, unfair business practices and declaratory relief, each 

of those causes of action are derivative of the . . . cause of action 

for failure to pay rest periods. [¶¶] Absent a failure by 

Stoneledge to pay plaintiffs for the required rest period, there 

would, as a consequence, be no unpaid wages remaining at the 

termination of the employment. Likewise, there would be no 

unfair business practice claim under [Government Code] section 

17200. And the declaratory relief claim would also fail absent the 

underlying statutory violation upon which the cause of action is 

based.” The plaintiffs timely appealed from the judgment. 

DISCUSSION

A. Wage Order No. 7 and Compensation for Rest Periods 

The Legislature authorized the Industrial Welfare 

Commission (IWC) to regulate the wages, hours, and working 

conditions of various classes of workers to protect their health 

and welfare. (Augustus v. ABM Security Services, Inc. (2016) 2

Cal.5th 257, 263; Rodriguez v. E.M.E., Inc. (2016) 246

Cal.App.4th 1027, 1033.) “To this end, the IWC promulgated socalled wage orders . . . for workers in a number of industries and 
7

occupations.” (Rodriguez, at pp. 1033-1034.)3 “As a consequence, 

„wage and hour claims are today governed by two complementary 

and occasionally overlapping sources of authority: the provisions 

of the Labor Code, enacted by the Legislature, and a series of 18 

wage orders, adopted by the IWC.‟” (Rodriguez, at p. 1034; see

Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 

1004, 1026.) “Those laws and wage orders are also subject to 

enforcement by a state agency, namely, the Division of Labor 

Standards Enforcement (DLSE).” (Rodriguez, at p. 1034; see

Brinker, at pp. 1028-1029 & fn. 11.)4

“An employer is required to authorize and permit the 

amount of rest break time called for under the wage order for its 

industry.” (Brinker, supra, 53 Cal.4th at p. 1033.) The rest 

period claim here is based on section 226.7 and Wage Order 

No. 7-2001, which applies to the mercantile industry. (See 

Cal. Code Regs. tit. 8, § 11070, subds. 1, 2(H) [defining 

“[m]ercantile [i]ndustry”] (Wage Order No. 7).) 

 

3 Although the IWC was defunded in 2004, its wage orders 

remain in effect. (Gonzalez v. Downtown LA Motors, LP (2013) 

215 Cal.App.4th 36, 43; Soderstedt v. CBIZ Southern California, 

LLC (2011) 197 Cal.App.4th 133, 145, fn. 1.)

4 “The DLSE is a division of the Department of Industrial 

Relations . . . , which is a department of California's Labor and 

Workforce Development Agency.” (Gomez v. J. Jacobo Farm 

Labor Contractor, Inc. (E.D. Cal. 2016) 188 F.Supp.3d 986, 997, 

fn. 13.)
8

Section 226.7 provides: “An employer shall not require an 

employee to work during a meal or rest or recovery period 

mandated pursuant to an applicable statute, or . . . order of the 

[IWC].” (§ 226.7, subd. (b).) “If an employer fails to provide an 

employee a meal or rest or recovery period in accordance with a 

state law, including, but not limited to, an . . . order of the 

[IWC], . . . the employer shall pay the employee one additional 

hour of pay at the employee‟s regular rate of compensation for 

each workday that the meal or rest or recovery period is not 

provided.” (§ 226.7, subd. (c).)

Wage Order No. 7 applies “to all persons employed in the 

mercantile industry whether paid on a time, piece rate, 

commission, or other basis.” (Cal. Code Regs. tit. 8, § 11070, 

subd. 1.) Subdivision 4 of Wage Order No. 7 establishes an 

employer‟s duty to pay such employees the minimum wage “for 

all hours worked.” (Id., § 11070, subd. 4(A).)5 With respect to 

rest periods, Wage Order No. 7 provides: “Every employer shall 

authorize and permit all employees to take rest periods, which 

insofar as practicable shall be in the middle of each work period. 

The authorized rest period time shall be based on the total hours 

worked daily at the rate of ten (10) minutes net rest time per four 

(4) hours or major fraction thereof. However, a rest period need 

 

5 Subdivision 2(G) of Wage Order No. 7 defines “hours 

worked” as “the time during which an employee is subject to the 

control of an employer, and includes all the time the employee is 

suffered or permitted to work, whether or not required to do so.” 

(Cal. Code Regs. tit. 8, § 11070, subd. 2(G).) “Wages” includes “all 

amounts for labor performed by employees of every description, 

whether the amount is fixed or ascertained by the standard of 

time, task, piece, commission basis, or other method of 

calculation.” (Id., § 11070, subd. 2(O).)
9

not be authorized for employees whose total daily work time is 

less than three and one-half (3 1/2) hours. Authorized rest period 

time shall be counted as hours worked for which there shall be no 

deduction from wages.” (Cal. Code Regs. tit. 8, § 11070, subd. 

12(A), italics added.) Like section 226.7, subdivision (c), Wage 

Order No. 7 further requires an employer who fails to provide an 

employee a rest period in accordance with the wage order‟s

provisions to pay the employee one hour of pay at the employee‟s 

regular rate of compensation for each work day the employer did 

not provide the employee with the rest period. (Id., § 11070, 

subd. 12(B).) 

“Wage orders are quasi-legislative regulations and are 

construed in accordance with the ordinary principles of statutory 

interpretation.” (Gonzalez v. Downtown LA Motors, LP (2013) 

215 Cal.App.4th 36, 43; see Aleman v. AirTouch Cellular (2012) 

209 Cal.App.4th 556, 568; see also Brinker, supra, 53 Cal.4th at 

p. 1027 [“[t]he IWC‟s wage orders are to be accorded the same 

dignity as statutes”].) “Generally, „[w]hen a wage order‟s validity 

and application are conceded and the question is only one of 

interpretation, the usual rules of statutory interpretation apply.‟”

(Rodriguez, supra, 246 Cal.App.4th at p. 1034; see Brinker,

at p. 1027.)

“The task of interpretation is to determine the legislative 

intent, looking first to the words of the wage order, construed in 

light of their ordinary meaning and statutory context.” 

(Rodriguez, supra, 246 Cal.App.4th at p. 1034; see Brinker, 

supra, 53 Cal.4th at p. 1026; Gonzalez, supra, 215 Cal.App.4th at 

p. 43.) “If the language of the wage order is clear, it is applied 

without further inquiry. [Citation.] If the language can be 

interpreted to have more than one reasonable meaning, a court 
10

may consider „“a variety of extrinsic aids, including the ostensible 

objects to be achieved, the evils to be remedied, the legislative 

history, public policy, contemporaneous administrative 

construction, and the statutory scheme of which the statute is a 

part.”‟” (Gonzales, at p. 44; see Aleman, supra, 209 Cal.App.4th 

at pp. 568-569.) “„Judicial construction that renders any part of 

the wage order meaningless or inoperative should be avoided.‟”

(Rodriguez, at p. 1034; accord, Brinker, at p. 1026; Gonzalez, 

at p. 44.) DLSE opinion letters, while not controlling, constitute 

“the type of experience and considered judgment that may 

properly inform our judgment.” (Augustus, supra, 2 Cal.5th 

at p. 267; see Brinker, supra, 53 Cal.4th at p. 1029, fn. 11; 

Rodriguez, at p. 1034.)

In general, “„[s]tate wage and hour laws “reflect the strong 

public policy favoring protection of workers‟ general welfare and 

„society‟s interest in a stable job market.‟”‟” (Gonzales, supra, 215 

Cal.App.4th at p. 44; see Cash v. Winn (2012) 205 Cal.App.4th 

1285, 1297.) “They are therefore liberally construed in favor of 

protecting workers. As our Supreme Court has stated, „“[i]n light 

of the remedial nature of the legislative enactments authorizing 

the regulation of wages, hours and working conditions for the 

protection and benefit of employees, the statutory provisions are 

to be liberally construed with an eye to promoting such 

protection.”‟” (Gonzales, at p. 44, quoting Brinker, supra, 53 

Cal.4th at pp. 1026-1027; see Augustus, supra, 2 Cal.5th at p. 262

[“we liberally construe the Labor Code and wage orders to favor 

the protection of employees”]; Peabody v. Time Warner Cable, Inc.

(2014) 59 Cal.4th 662, 667 [“[s]tatutes governing conditions of 

employment are to be construed broadly in favor of protecting 
11

employees”]; Murphy v. Kenneth Cole Productions, Inc. (2007) 40 

Cal.4th 1094, 1103 [same].) 

The trial court concluded that Wage Order No. 7 did not 

require Stoneledge to pay its commissioned employees separately 

for their rest periods and that Stoneledge‟s commission 

agreement “specifically accounted for all hours worked by the

salespersons,” including rest periods. We review this conclusion, 

which the trial court reached on summary judgment, and the 

court‟s interpretation of Wage Order No. 7, de novo. (Schachter v. 

Citigroup, Inc. (2009) 47 Cal.4th 610, 618; Rodriguez, supra, 246 

Cal.App.4th at p. 1032; Gonzales, supra, 215 Cal.App.4th at p. 44; 

see Araquistain v. Pacific Gas & Electric Company (2014) 229 

Cal.App.4th 227, 231 [“„the interpretation and application of a 

statutory scheme to an undisputed set of facts is a question of law 

[citation] which is subject to de novo review on appeal‟”].)

B. Wage Order No. 7 Requires Employers To Separately 

Compensate Covered Employees for Rest Periods

The parties agree that Wage Order No. 7 applies to 

Stoneledge‟s sales associates and that Stoneledge permitted and 

authorized the rest periods mandated by California law and 

Wage Order No. 7. The parties disagree, however, whether 

California law, including Wage Order No. 7, required Stoneledge 

to separately compensate its sales associates for such rest 

periods. We conclude it does.

The plain language of Wage Order No. 7 requires 

employers to count “rest period time” as “hours worked for which 

there shall be no deduction from wages.” (Cal. Code Regs. tit. 8, 

§ 11070, subd. 12(A), italics added.) In Bluford v. Safeway Stores, 

Inc. (2013) 216 Cal.App.4th 864 the court interpreted this 
12

language to require employers to “separately compensate[ ]” 

employees for rest periods where the employer uses an “activity 

based compensation system” that does not directly compensate 

for rest periods. (Id. at p. 872.)

Bluford involved Safeway truck drivers who sued Safeway 

for, among other things, failing to provide paid rest periods. 

(Bluford, supra, 216 Cal.App.4th at p. 868.) Safeway paid the 

drivers “based on mileage rates applied according to the number 

of miles driven, the time when the trips were made, and the 

locations where the trips began and ended.” (Id. at p. 872.) 

Safeway asserted it intended to pay drivers for their rest periods 

and its compensation system purportedly subsumed those 

payments into the mileage rates Safeway negotiated in the 

drivers‟ collective bargaining agreement. (Id. at p. 871.) None of 

the bases on which Safeway paid its drivers, however, directly 

compensated them for rest periods. (Id. at p. 872.) 

The court found Safeway‟s compensation system violated 

California law because the wage order applicable in that case, 

like Wage Order No. 7, prohibited employers from “deduct[ing] 

wages for rest periods.”6 (Bluford, supra, 216 Cal.App.4th at p. 

871.) The court explained “[t]he wage order‟s requirement not to 

deduct wages for rest periods presumes the drivers are paid for 

their rest periods.” (Ibid.) In the context of a piece-rate 

compensation plan like the one used by Safeway,7this 

 

6 Like Wage Order No. 7, the wage order in Bluford counted 

authorized rest periods as “hours worked.” (See Bluford, supra, 

216 Cal.App.4th at p. 871, citing Wage Order Nos. 7, 9, Cal. Code 

Regs. tit. 8, §§ 11070, subd. 12; 11090, subd. 12.) 

7 Under a “piece-rate” compensation system, employers pay 

employees “according to the number of units turned out,” for 
13

requirement means that employers must separately compensate

employees for rest periods. (Id. at p. 872.) 

Bluford relied on Armenta v. Osmose, Inc. (2005) 135 

Cal.App.4th 314, which held that employers cannot comply with 

minimum wage obligations by averaging wages across multiple 

pay periods; instead, “[t]he minimum wage standard applies to 

each hour worked by [employees] for which they were not paid.” 

(Id. at p. 324.) In Armenta, the court addressed a compensation 

plan that paid employees only for “productive” time, and not for 

“nonproductive” time such as time spent traveling between job 

sites. The court explained that California wage orders (like Wage 

Order No. 7) that require employers to compensate employees 

“for all hours worked” require employers to pay employees for “all 

hours,” including nonproductive time, “at the statutory or agreed 

rate and no part of this rate may be used as a credit against a 

minimum wage obligation.” (Armenta, supra, 135 Cal.App.4th at 

p. 323.) Thus, under California law, the minimum or contracted 

wage requirement “applies to each hour worked by [employees] 

for which they [are] not paid.” (Id. at p. 324.)

Piece-rate compensation plans do not directly account for 

rest periods during which, like the nonproductive hours in 

Armenta, employees cannot earn wages. The court in Bluford 

held that allowing employers like Safeway to account for rest 

periods indirectly by negotiating a purportedly higher piece rate 

violates the principles set forth in Armenta because such 

compensation plans effectively “averag[e] pay to comply with the 

minimum wage law instead of separately compensating

 

example, the amount of produce harvested, the number of miles 

driven, or the yard of carpet installed. (See DLSE, Enforcement 

Policies and Interpretations Manual (Mar. 2006) § 2.5.1, p. 2-2.) 
14

employees for their rest periods at the minimum or contractual 

hourly rate.” (Bluford, supra, 216 Cal.App.4th at p. 872.) 

We agree with Bluford that Wage Order No. 7 requires 

employers to separately compensate employees for rest periods if 

an employer‟s compensation plan does not already include a

minimum hourly wage for such time. (See Gonzales, supra, 215 

Cal.App.4th at pp. 48-49 [concluding that the identical language 

in Wage Order No. 4 requires employers to separately pay piecerate workers for nonproductive time].) All of the federal courts 

that have considered this issue of California law have reached a 

similar conclusion and have held employers must separately 

compensate employees paid by the piece for nonproductive work 

hours. (See Perez v. Sun Pacific Farming Co-op., Inc. (E.D. Cal., 

June 8, 2015, No. 1:15-CV-00259-KJM-SKO) 2015 WL 3604165, 

pp. 5-7; Ridgeway v. Wal-Mart Stores, Inc. (N.D. Cal. 2015) 107 

F.Supp.3d 1044, 1053; Reinhardt v. Gemini Motor Transport

(E.D. Cal. 2012) 869 F.Supp.2d 1158, 1168; Carrillo v. Schneider 

Logistics, Inc. (C.D. Cal. 2011) 823 F.Supp.2d 1040, 1044; 

Cardenas v. McLane FoodServices, Inc. (C.D. Cal. 2011) 796 

F.Supp.2d 1246, 1252; Ontiveros v. Zamora (E.D. Cal., Feb. 20, 

2009, No. CIV.S-08-567 LKK/DAD) 2009 WL 425962, p. 3.)

8

 

8 Stoneledge argues the plaintiffs‟ reliance on federal cases 

interpreting California employment law is misplaced. It is 

proper, however, to look to federal decisions interpreting 

California law where the reasoning is “analytically sound.” 

(Futrell v. Payday California, Inc. (2010) 190 Cal.App.4th 1419, 

1432; see id. at p. 1432, fn. 6 [“[a]lthough not binding precedent 

on our court, we may consider relevant, unpublished federal 

district court opinions as persuasive”]; Gonzales, supra, 215 

Cal.App.4th at p. 49 [a federal case applying California 

employment law is “instructive” where it involves similar facts].)
15

C. The Requirement To Separately Compensate for Rest 

Periods Applies to Employees Paid on Commission

Neither Bluford nor the federal cases applying California 

law involved employees paid on commission. Nor did any of those 

cases address the issue whether the requirement of separately 

compensating employees for rest periods applies to commissioned 

employees. We conclude, however, that Wage Order No. 7 applies 

equally to commissioned employees, employees paid by piece rate,

or any other compensation system that does not separately 

account for rest breaks and other nonproductive time. 

The plain language of Wage Order No. 7 covers employees 

paid by commission. (See Cal. Code Regs. tit. 8, § 11070, subd. 1 

[applying to “all persons employed in the mercantile industry 

whether paid on a time, piece rate, commission, or other basis”]; 

id. at § 11070, subd. 2(O) [“wages” includes “amounts for labor 

performed by employees of every description, whether the 

amount is fixed or ascertained by the standard of time, task, 

piece, commission basis, or other method of calculation”].) 

Where, as here, the language of a wage order is unambiguous, it 

is dispositive. (Brinker, supra, 53 Cal.4th at p. 1028; see also 

Gonzales, supra, 215 Cal.App.4th at p. 49 [the wage order “does 

not allow any variance in its application based on the manner of 

compensation”].) 

Moreover, nothing about commission compensation plans 

justifies treating commissioned employees differently from other 

employees. (See Gonzales, supra, 215 Cal.App.4th at p. 49 

[“[t]hat [defendant] compensated its technicians on a piece-rate 

basis is not a valid ground for varying either the application or 
16

interpretation of the wage order”];9 Ridgeway, supra, 107 

F.Supp.3d at pp. 1052-1053 [“differences in pay structure are 

non-dispositive of the issue . . . whether plaintiffs must be paid 

for all hours worked”]; Cardenas, supra, 796 F.Supp.2d at p. 1252 

[distinctions in payment systems do not detract from the holding 

in Armenta that employers must compensate for “all hours 

worked”].) The commission agreement used by Stoneledge during 

the class period is analytically indistinguishable from a piece-rate 

system in that neither allows employees to earn wages during 

rest periods. Indeed, the purpose of a rest period is to rest, not to 

work. (See § 226.7, subd. (b) [an employer may not require an 

employee “to work during a meal or rest or recovery period 

mandated pursuant to an applicable [wage] order”]; Augustus, 

supra, 2 Cal.5th at p. 273 [“[a] rest period, in short, must be a 

period of rest”]; Perez, supra, 2015 WL 3604165 at p. 7 [“[w]hen 

an employer pays its employees by the piece . . . those employees 

cannot add to their wage during rest breaks; a break is not for 

rest if piece-rate work continues”]; DLSE, Enforcement Policies 

 

9 Gonzales acknowledged the trial court in that case did not 

address, and therefore the Gonzales court did not consider on 

appeal, an employer‟s obligations with respect to “mandatory rest 

breaks” or “employees who are compensated under commission 

payment plans or any other incentive-based compensation 

systems.” (Gonzales, supra, 215 Cal.App.4th at p. 54.) 

Stoneledge argues that this statement somehow precludes our 

conclusion that the reasoning of Armenta, Gonzales, and Bluford

applies to employees paid by commission. At best, Stoneledge 

misreads Gonzales when it argues that Gonzales “expressly 

refused to extend” Armenta and Bluford (which was actually 

decided after Gonzales) to commission pay plans. Gonzales does 

not hold or say any such thing. 
17

and Interpretations Manual (Mar. 2006) § 45.3.3, p. 45-8 [“the 

rest period begins when the employee reaches an area away from

the work station that is appropriate for rest”].)

Stoneledge argues that commission sales may continue 

through rest periods because “sales and resultant commissions 

are routinely earned while employees are not present, including 

while on break.” Stoneledge cites no authority or evidence in the 

record for this assertion. It also makes no sense to assume that a 

commission-based employee who works 100 minutes per 40-hour 

work week longer than another employee—for example, by 

greeting new customers, following-up with potential leads, or 

answering emails and phone calls related to pending orders—

would not earn more in commissions than the employee who 

spent those same 100 minutes in a break room. (See Cicairos v. 

Summit Logistics, Inc. (2005) 133 Cal.App.4th 949, 963 [citing 

testimony that an employee did not take rest breaks because 

“rest break[s] would cost me money”]; Balasanyan v. Nordstrom, 

Inc. (S.D. Cal. 2013) 294 F.R.D. 550, 560 [“salespeople may have 

a difficult time selling to customers [and earning commissions] 

when they are not available to customers”].) Stoneledge admits 

as much when it concedes “[t]he only opportunity lost by taking a 

rest period is to make a sale that would increase wages beyond 

the $12 minimum weekly pay rate.” 

The DLSE Enforcement Policies and Interpretations 

Manual supports our conclusion. Section 47.7 of the DLSE 

Manual, entitled “All Hours Must Be Compensated Regardless Of 

Method Used In Computation,” states that “if, as a result of the 

directions of the employer, the compensation received by piece 

rate or commissioned workers is reduced because they are 

precluded, by such directions of the employer, from earning either 
18

commissions or piece rate compensation during a period of time, 

the employee must be paid at least the minimum wage (or 

contract hourly rate if one exists) for the period of time the 

employee‟s opportunity to earn commissions or piece rate [is 

reduced].” (DLSE, Enforcement Policies and Interpretations 

Manual (Mar. 2006) § 47.7, p. 47-7, italics added; see Peabody, 

supra, 59 Cal.4th 662, 670 [adopting the DLSE Manual‟s 

interpretation of a wage order even though “the DLSE‟s 

enforcement policies are not entitled to deference”]; See’s Candy 

Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 902 

[although “statements in the DLSE Manual are not binding on 

the courts because the rules were not adopted under the 

Administrative Procedure Act,” they “may be considered for their 

persuasive value”]; accord, Augustus, supra, 2 Cal.5th at p. 262; 

Brinker, supra, 53 Cal.4th at p. 1029, fn. 11.) Thus, the DLSE 

Manual treats commissioned and piece-rate employees alike for 

purposes of applying the minimum wage requirement to 

nonproductive working hours. There is no reason California law

should not treat these categories of workers the same for 

purposes of complying with the requirement to provide paid rest 

periods. 

Stoneledge responds to the DLSE Manual‟s interpretation 

of the Labor Code and wage orders by seizing on the language 

that refers to tasks performed “as a result of the directions of the 

employer” and arguing that, because rest breaks for 

commissioned employees do not fall into this category, the DLSE 

Manual‟s guidance is not persuasive. The trial court agreed with 

this argument, stating that rest periods are “readily 

distinguishable from the required yet uncompensated work” at 

issue in other cases. Both Stoneledge and the trial court, 
19

however, improperly discount the language of Wage Order No. 7, 

which counts rest periods as “hours worked” and requires 

compensation for those hours even though rest periods are, 

admittedly and by design, nonproductive. (Cal. Code Regs. tit. 8, 

§ 11070, subd. 12(A); see DLSE Manual, § 45.3.2, at p. 45-8

[subdivision 12 of each wage order “requires that the rest period 

time shall be counted as hours worked for which there shall be no 

deduction from wages”].) In addition, by requiring employers to 

compensate a commissioned employee for time during which the 

employee is working but precluded from selling (such as while in 

a department meeting or training session), section 47.7 of the 

DLSE Manual does not negate that requirement for time 

attributable to rest periods. It simply makes clear that 

commissioned employees, like all employees subject to Wage 

Order No. 7, are entitled to compensation for each hour worked. 

Moreover, California law and public policy have long 

viewed mandatory rest periods “„as part of the remedial worker 

protection framework‟” and require us to construe Wage Order 

No. 7 to “best effectuate[ ] that protective intent.” (Brinker, 

supra, 53 Cal.4th at p. 1027; accord, Rodriguez, supra, 246 

Cal.App.4th at p. 1039.) Indeed, the Legislature views the right 

to a rest period as so sacrosanct that it is unwaivable. (See § 219 

[“[n]othing in this article [including section 226.7] . . . can in any 

way be contravened or set aside by a private agreement”]; 

Brinker, 53 Cal.App.4th at p. 1033 [right to rest breaks cannot be 

waived].) Compensation plans that do not compensate employees 

directly for rest periods undermine this protective policy by 

discouraging employees from taking rest breaks. (See Augustus, 

supra, 2 Cal.5th at p. 271 [requiring security guards to take “oncall rest periods” would “undermine the rationale underlying the 
20

provision of rest periods during the workday”]; Cicairos, supra, 

133 Cal.App.4th at 963 [compensation plan that did not track 

rest periods discouraged employees from taking rest breaks].)

Stoneledge also argues that Wage Order No. 7 cannot 

require employers to pay commissioned employees (as opposed to 

piece-rate employees) separately for rest periods because section 

226.2, which requires employers to compensate piece-rate 

employees for rest, recovery, and other nonproductive time, does 

not apply to commissioned employees. Nothing in section 226.2, 

however, suggests that the Legislature intended to adopt a 

different rule for commission-based employees or to nullify the 

plain language of Wage Order No. 7. (See Rodriguez, supra, 246 

Cal.App.4th at p. 1034 [“„[j]udicial construction that renders any 

part of the wage order meaningless or inoperative should be 

avoided”]; accord, Gonzales, supra, 215 Cal.App.4th at p. 43.) 

Section 226.2 does not even mention commission-based 

employees. Instead, the introductory paragraph of section 226.2 

states, in relevant part: “This section shall apply for employees 

who are compensated on a piece-rate basis for any work 

performed during a pay period,” and “shall not be construed to 

limit or alter minimum wage or overtime compensation 

requirements, or the obligation to compensate employees for all 

hours worked under any other statute or local ordinance.” (Italics 

added.) Section 226.2 does not limit or alter the obligation of 

employers to compensate commission-based employees “for all 

hours worked,” including for rest periods. The fact the 

Legislature “could have drafted [section 226.2] to include both . . . 

piece-rate and commission plans,” as Stoneledge argues, indicates 

nothing about the Legislature‟s intent with regard to commission 

plans, and we decline to imply any such intent. (See In re 
21

Christian S. (1994) 7 Cal.4th 768, 776 [“„an intention to legislate 

by implication is not to be presumed‟”]; Sabatasso v. Superior 

Court (2008) 167 Cal.App.4th 791, 797 [“„“[a]s a rule, courts 

should not presume an intent to legislate by implication”‟”].)

10

D. Stoneledge’s Commission Agreement Did Not 

Separately Compensate Sales Associates for Rest 

Periods

Stoneledge contends that its commission plan complied 

with California law by “counting as hours worked” the time sales 

associates spent taking rest breaks and not deducting from wages 

for those hours. These arguments misinterpret California law 

and ignore how Stoneledge‟s commission agreement worked.

We agree with Stoneledge that, under the commission 

agreement in effect during the class period, the company did in 

fact keep track of hours worked, including rest periods. We also 

agree that the company treated “break time identically with 

other work time.” The problem with Stoneledge‟s compensation 

system, however, is that the formula it used for determining 

commissions did not include any component that directly 

compensated sales associates for rest periods. Stoneledge merely 

multiplied weekly “Delivered Sales” (less returns and credits) by 

an applicable commission rate and paid that amount if it 

 

10 We therefore deny Stoneledge‟s motion for judicial notice of 

various legislative and Department of Industrial Relations 

materials regarding section 226.2 as not relevant to the appeal. 

(See Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 544, fn. 4; 

Newton-Enloe v. Horton (2011) 193 Cal.App.4th 1480, 1492, 

fn. 3.) We grant its motion for judicial notice of the 2002 Update 

of the DLSE Enforcement Policies and Interpretation Manual 

(Revised), sections 2.5.1 and 2.5.4. 
22

exceeded the minimum contractual rate. Like the compensation 

plans courts have found unlawful for failing to pay for 

nonproductive time, Stoneledge‟s commission agreement did not 

compensate for rest periods taken by sales associates who earned 

a commission instead of the guaranteed minimum. (See Bluford, 

supra, 216 Cal.App.4th at pp. 870, 872 [Safeway‟s piece-rate plan 

did not “directly compensate[ ] for rest periods,” “did not account 

for rest periods or provide an ability to be paid for them,” and 

“provided no means by which an employee could verify he was 

paid for his rest periods”]; Gonzales, supra, 215 Cal.App.4th at 

p. 50 [“if [an employee‟s] piece-rate pay is allocated only to piecerate hours, he is not paid at all for his nonproductive hours”];

Ridgeway, supra, 107 F.Supp.3d at p. 1050 [compensation system 

that “paid [for rest breaks] through activity pay for other tasks” 

did not comply with California law]; Shook v. Indian River 

Transp. Co. (E.D. Cal. 2014) 72 F.Supp.3d 1119, 1125, fn. 3 

[“hours worked pursuant to a piece-rate system may not be used 

as a credit toward rest breaks, which, like other hours worked, 

must be separately compensated”]; Cardenas, supra, 796 

F.Supp.2d at p. 1253 [“piece-rate formula” whose “components do 

not calculate for the pre- and post-shift duties and breaks . . . did 

not separately compensate employees for [this time] in violation 

of California law”]; Ontiveros, supra, 2009 WL 425962 at pp. 2-3 

[payment system that paid by the task failed to compensate for 

nonproductive work such as rest breaks].) Sales associates who 

were paid their commission received the same amount of 

compensation regardless of whether they took rest breaks. 

For sales associates whose commissions did not exceed the 

minimum rate in a given week, the company clawed back (by 

deducting from future paychecks) wages advanced to compensate 
23

employees for hours worked, including rest periods. The 

advances or draws against future commissions were not 

compensation for rest periods because they were not 

compensation at all. At best they were interest-free loans. 

Stoneledge cites no authority for the proposition that a loan for 

time spent resting is compensation for a rest period. To the 

contrary, taking back money paid to the employee effectively 

reduces either rest period compensation or the contractual 

commission rate, both of which violate California law. (See § 221 

[prohibiting employers from collecting or receiving from an 

employee “any part of wages theretofore paid by said employer”]; 

§ 222 [prohibiting employers from withholding any part of a wage 

agreed upon]; § 223 [prohibiting employers from “secretly 

pay[ing] a lower wage while purporting to pay the wage 

designated by statute or by contract”]; cf. Armenta, supra, 135 

Cal.App.4th at p. 323 [averaging wages across pay periods to 

satisfy minimum wage requirements “effectively reduces 

[employees‟] contractual hourly rate”].)

Thus, when Stoneledge paid an employee only a 

commission, that commission did not account for rest periods. 

When Stoneledge compensated an employee on an hourly basis 

(including for rest periods), the company took back that 

compensation in later pay periods. In neither situation was the 

employee separately compensated for rest periods.

The table in Stoneledge‟s commission agreement in effect 

during the class period, provided again here for clarity,

illustrates these problems: 
24

Week # Min. 

Weekly Pay

Weekly Advanced 

Commission

Gross 

Pay

Week Draw 

(Owe)

Cumulative 

Draw (Owe)

1 $480.40 $300 $480.40 $180.40 $180.40

2 $480.40 $400 $480.40 $80.40 $260.80

3 $480.40 $550 $480.40 -$69.60 $191.20

4 $480.40 $800 (-$191.20 draw) $608.80 $0 $0

5 $480.40 $750 $750 $0 $0

A sales associate who works 40 hours in Week 1 but earns 

only $300 in commissions is advanced an additional $180.40 to 

bring that employee up to a minimum $12.01 per hour worked 

(including rest periods). In Week 2 the sales associate improves 

but still earns only $400 in commissions and the company must 

advance another $80.40 from future commissions to ensure the 

employee receives the guaranteed minimum. The draws paid in 

Weeks 1 and 2 are sufficient to pay the sales associate $12.01 per 

hour for 1.67 hours of authorized break time during each of those 

weeks. When the sales associate finally earns commissions above 

the guaranteed minimum in Weeks 3 and 4, however, Stoneledge 

deducts the amounts advanced in Weeks 1 and 2 from gross pay 

in Weeks 3 and 4. Thus, the draws paid in Weeks 1 and 2 are not 

compensation to the employee (for rest periods or otherwise) 

because the employee has to pay them back. When in Week 5 the 

sales associate finally earns a full commission, it is impossible to 

determine whether the sales associate is compensated for rest 

periods and, if so, at what rate. The sales associate in Week 5

earns and is paid the same amount regardless of whether he or 

she took a rest break during that week. (See Murphy v. Kenneth 

Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1104 [“[i]f denied 

two paid rest periods in an eight-hour work day, an employee 

essentially performs 20 minutes of „free‟ work, i.e., the employee 

receives the same amount of compensation for working through 

the rest periods that the employee would have received had he or 
25

she been permitted to take the rest periods”]; accord, Augustus, 

supra, 2 Cal.5th at p. 266.) Thus, Stoneledge‟s contention that “a 

Sales Associate at rest is earning at least $12 per hour” is only 

true for sales associates who were never paid by commission. 

That Stoneledge “accounted for” or “tracked” hours worked 

including rest periods does not, without more, comply with 

California law. (See Armenta, supra, 135 Cal.App.4th at p. 324 

[compensation plan that paid plaintiffs weekly at an amount 

exceeding the total hours worked multiplied by the minimum 

wage did not pay minimum wage “for each hour worked” as 

required by California law]; Perez, supra, 2015 WL 3604165

at p. 3 [rejecting the argument that an employer may pay piece 

rate employees for rest period time through their “total piece rate 

earnings” so long as those earnings “average out to at least the 

minimum wage”]; Balasanyan, supra, 294 F.R.D. at p. 554 

[certifying class of plaintiffs alleging that a guaranteed minimum 

draw per hour on future commissions did not adequately 

compensate them for non-selling time]; Ontiveros, supra, 2009 

WL 425962 at p. 2 [rejecting the argument that an employer may 

pay piece rate employees for rest breaks and other non-piece rate 

work “so long as the average hourly compensation for employees 

does not fall below the minimum wage”].)

Our conclusion does not cast doubt on the legality of 

commission-based compensation. Instead, we hold only that such 

compensation plans must separately account and pay for rest 

periods to comply with California law. Nor will our decision lead 

to hoards of lazy sales associates. The commission agreement in 

effect during the class period provided that a sales associate who 

failed to meet minimum sales expectations (which generated 

commissions well above the guaranteed minimum) was subject to 
26

disciplinary measures up to and including termination. Thus, 

employers like Stoneledge have methods to ensure that an 

employee‟s productivity does not suffer as a result of complying 

with California law by paying a minimum wage for rest periods. 

Because Stoneledge did not separately compensate sales 

associates for rest periods as required by California law, the trial 

court erred in granting summary adjudication on the plaintiffs‟ 

cause of action for violation of section 226.7. The trial court‟s 

ruling that the plaintiffs‟ other causes of action failed because the 

section 226.7 claim failed was also erroneous. Because the trial 

court did not address the merits of Stoneledge‟s motion for 

summary adjudication on the plaintiffs‟ other causes of action, 

the court on remand is to consider the remainder of Stoneledge‟s 

motion. 

DISPOSITION

The judgment is reversed. The trial court is directed to 

vacate its order granting Stoneledge‟s motion for summary 

judgment and to enter a new order denying Stoneledge‟s motion 

for summary judgment and Stoneledge‟s motion for summary 

adjudication on the cause of action for violation of section 226.7. 

The trial court is also directed to rule on the merits of 
27

Stoneledge‟s motion for summary adjudication on the plaintiffs‟ 

other causes of action. Plaintiffs are to recover their costs on 

appeal.

SEGAL, J.

We concur:

PERLUSS, P. J.

KEENY, J.*

 

*Judge of the Los Angeles Superior Court, assigned by the 

Chief Justice pursuant to article VI, section 6 of the California 

Constitution.