Wednesday, September 5, 2012

Job recruiters ruled "employed in sales," exempt from overtime

Sometimes, the specific work your employees do triggers special handling under California Labor Law - just last month, I wrote about mortgage underwriters being ruled nonexempt for purposes of overtime and FLSA.  This month, we have a new decision relating to job recruiters.

Muldrow v. Surrex Solutions Corp. (August 29, 2012)___Cal.App.___) was originally transferred back to the Court of Appeal by the California Supreme Court with instructions to reconsider an earlier ruling in light of Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004.

Finding that Brinker had no impact on an earlier ruling, the Court of Appeal affirmed an earlier decision and ruled that job recruiters were employed "principally in selling a product or service," and fell within the commissioned employee exemption from overtime law. The recruiters' job was to offer a candidate employee’s services to a client in exchange for a payment of money from the client to the recruiters’ employer, and it was only upon the successful placement of a candidate that the employer recorded a “sale” and the client was required to pay.

The facts of this case showed that seven to ten recruiters consistently received payments in excess of their guaranteed draw (suggesting a commission system), and approximately two-thirds of the recruiters in the employer's current workforce had been paid commissions.  This, in the eyes of the Court of Appeal, was sufficient to establish that the commission system was bona fide and the employees were not entitled to overtime.