Ramirez v. Yosemite Water Co‪.‬

Generally, employees in the State of California who work more than 40 hours per week and 8 hours per day (at least, in the latter case, up until January 1, 1998), have had the right to receive premium pay for the hours worked over this limit. (See Wilcox, California Employment Law, § 3.04, pp. 3-21-3- 28.) Labor Code section 11711 expressly excludes from the overtime laws employees who are ""outside salespersons""2 and the California Industrial Welfare Commission (IWC), the agency charged with implementing section 1171, defined the term ""outside salesperson"" in Wage Order No. 7-80, as someone who ""regularly works more than half the working time"" engaged in sales activities outside the workplace. (Cal. Code Regs., tit. 8, § 11070, subd. 2(I) (hereinafter IWC Order No. 7-80, 2(I)).)3 In this case we are called on to decide whether an employee who performs a mixture of sales and nonsales duties is an ""outside salesperson"" within the meaning of section 1171. The trial court and the Court of Appeal came to the Conclusion that the employee, who delivered bottled water and was also expected to sell the water service to new customers, was an outside salesperson for purposes of section 1171. Their Conclusion was based on a reading of federal regulations that differ substantially from the state regulations applicable in this case: the former regulations define the term by determining the employees' ""primary purpose,"" rather than by calculating how they spend their time. We conclude these courts may have erred in determining that the employee in this case was an outside salesperson because they incorrectly relied on the federal regulation and interpretation of that regulation when construing this state's distinct definition of ""outside salesperson."" Accordingly, we reverse the Court of Appeal's judgment and remand for further proceedings.