If you have exempt outside sales employees (like those who work on commission and are regularly out meeting customers), a new California court decision just made it easier to understand how to calculate their paid sick leave.

The Issue

There’s been confusion about how to calculate paid sick leave (PSL) for these employees — especially whether you should include commissions in the calculation.

The Court’s Answer

The court ruled:

• You can pay sick leave at their base hourly rate (excluding commissions) — as long as that’s how you pay them for other types of paid time off (like vacation or PTO).
• This applies even though these workers are classified as “exempt.”

Why This Matters

For years, state guidance suggested you should include commissions, but the court said otherwise. So if your policy aligns with how you pay other types of leave, you’re likely in the clear.

What Employers Should Do

• Review your sick leave policy to make sure it’s consistent with how you handle other paid leave.
• Check your payroll process to ensure base hourly rate is being applied correctly for outside sales employees.
• Talk to your employment attorney if you’ve been including commissions or following older guidance.

Need Help Updating Your Sick Leave Policy?

For questions about how this ruling may affect your business or if you’re unsure how to properly calculate paid sick leave for your employees, contact employment law attorney Scott Liner at Chase Law Group or call 310.545.7700 to schedule a consultation. We’re here to help you stay compliant and avoid costly mistakes.

Updating your sick leave policy ensures compliance with the law and protects your business from costly mistakes.
Contact Chase Law Group for help

WWW.CHASELAWMB.COM
310-545-7700

_{Please note that this article is for informational purposes only and should not be considered legal advice and does constitute an attorney-client relationship. It is recommended to consult with an attorney directly for specific guidance pertaining to your business and its practices.}