Labor & Employment Law Blog

The ruling in Hirdman v. Charter Communications, LLC affirmed that outside sales employees are properly considered “exempt employees” under California’s paid sick leave law, meaning employers may calculate outside sales employees’ sick pay based on how they calculate pay for other forms of paid leave time. Hirdman v. Charter Commc'ns, LLC (Cal. Ct. App. Aug. 4, 2025) No. D084304, 2025 WL 2205862.

The case originated when a former outside salesperson, Bradley Hirdman, filed a Private Attorneys General Act (PAGA) lawsuit against Charter Communications, claiming he was misclassified for purposes of sick leave pay. Hirdman argued that although outside salespeople are exempt from overtime pay requirements, the paid sick leave law does not specify whether they are considered exempt for purposes of calculating sick leave. Because of this silence, he contended that outside sales employees should be considered “nonexempt” under the paid sick leave law. Such a classification would potentially result in a higher paid sick leave calculation, based on prior earnings, including commissions.

Charter countered that the term “exempt employee,” though not defined in the paid sick leave law, should be interpreted to include anyone exempt from overtime—including outside salespeople. Based on this meaning, Charter maintained that it properly calculated sick leave using the employee’s base rate of pay, excluding commissions, consistent with how it handled other types of paid leave.

The trial court agreed with Charter, and the appellate court affirmed. Significantly, the appellate court noted that absent the Legislature’s definition of “exempt employees,” it could adopt a well-understood legal meaning used in the private employment context—employees who are not entitled to overtime. It further concluded that had the Legislature intended to limit the definition of “exempt employees” to only the administrative, executive and professional exemptions, it could have done so. The court also observed that in other subdivisions of the paid sick leave law, the Legislature explicitly limited certain provisions to only administrative, executive, and professional exemptions. The absence of such limitation in this context suggested that the Legislature intended a broader application of the term “exempt.” Although Hirdman presented an opinion letter from the Labor Commissioner’s office that supported his argument, the court noted that the opinion letter was not a formal agency interpretation and not binding on the court.

What This Means for Employers:

Employers may calculate paid sick leave for outside salespersons—classified as exempt under California wage and hour law—based on the same method used for other types of paid leave. There is no legal requirement to include commissions or use the “regular rate of pay” method reserved for nonexempt employees.

Employers should ensure their sick leave policies clearly define how sick pay is calculated for both exempt and nonexempt employees and align with the statutory framework confirmed by this ruling.

Employers with questions regarding employee classifications and paid sick leave laws may contact the authors of this post or their usual employment law counsel at AALRR.

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.

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