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Wage & Hour Violations

California Wage Order 7: Mercantile Industry Rules

Who California Wage Order 7 covers and the 2026 overtime, commission, break, reporting-time, seating and uniform rules for retail and wholesale workers.

Reviewed by Jonathan P. LaCour, Esq. CEO · Senior Trial Counsel

Updated 9 min read

In this guide10 sections
  1. Who Wage Order 7 covers
  2. Who is exempt from Order 7
  3. Overtime under Order 7, including the commission exemption
  4. Meal and rest breaks for retail and wholesale workers
  5. Reporting time pay and split shifts
  6. Uniforms, tools, meals and lodging
  7. The right to a seat, and other working conditions
  8. What’s out of date on the posted Order 7
  9. What to do if your employer isn’t following Order 7
  10. Frequently asked questions

California Wage Order 7 sets the pay, hours and working-condition rules for the mercantile industry: businesses that buy, sell or distribute goods at retail or wholesale, or rent out goods. If you work at a store, a wholesale house, a gas station, a hardware or building-supply business, an equipment rental company or a mail-order operation, Order 7 is very likely your wage order.

Order 7 contains rules that aren’t spelled out in the Labor Code, including the right to a seat when the work allows it, an overtime exemption for commission salespeople, and uniform and tool rules. And the posted copy is partly out of date: the order on the Department of Industrial Relations (DIR) website still prints the 2017–2020 minimum wage table, but the state minimum wage is $16.90 an hour in 2026 and $17.40 on January 1, 2027.

This guide covers who Order 7 applies to, its exemptions, overtime (including the commission exemption), meal and rest breaks, reporting time and split shifts, uniforms, meal and lodging credits, seating, records, and what to do if your employer isn’t following the rules.

Key takeaways
  • Wage Order 7 covers businesses that sell, distribute or rent goods at retail or wholesale, and generally every non-exempt employee they hire.
  • The posted order still shows 2017–2020 pay; the state minimum wage is $16.90 in 2026 and $17.40 from January 1, 2027.
  • Commission salespeople are exempt from overtime only when their earnings exceed 1.5 times the minimum wage and more than half their pay is commissions.
  • Cashiers and other retail workers must get a suitable seat when the tasks at their station reasonably permit sitting.
  • Missed meal or rest breaks are worth one hour of pay each per workday, and most wage claims must be filed within three years.

Who Wage Order 7 covers

Order 7 defines the mercantile industry as any business “operated for the purpose of purchasing, selling, or distributing goods or commodities at wholesale or retail; or for the purpose of renting goods or commodities” (Order 7, §2(H); Cal. Code Regs., tit. 8, §11070).

The Labor Commissioner’s “Which IWC Order?” guide lists examples including retail stores, wholesale houses, hardware and building-materials stores, florists, gas stations, antique stores, auction houses, thrift shops, mail-order houses, telephone soliciting, equipment and uniform rentals (but not vehicle rentals, which fall under Order 9), and bakeries, donut shops and ice cream stores that don’t provide tables for customers.

Industry first, then occupation

Wage orders follow your employer’s main business, not your job. If your employer is a retailer, Order 7 generally covers everyone it employs, including cashiers, stockers, bookkeepers, buyers and mechanics. The Labor Commissioner’s examples:

  • A bookkeeper at a retail store is under Order 7; a bookkeeper at an accounting firm is under Wage Order 4.
  • A gift shop run by a hotel or hospital is under the order for the main business (Order 5).
  • A restaurant inside a department store but run as a separate company with separate management is under Order 5, while the store stays under Order 7.
  • A warehouse whose main purpose is storage falls under Order 9, even if it has a sales staff.
Commission sales overtime exemption threshold of $25.35 per hour in 2026 under Wage Order 7

Who is exempt from Order 7

The hours, overtime and break sections (§§3–12) don’t apply to properly classified executive, administrative and professional employees. Each exemption requires that the employee be primarily engaged in exempt duties, customarily exercise discretion and independent judgment, and earn a monthly salary of at least twice the state minimum wage for full-time (40-hour) work. In 2026 that is $70,304 a year; in 2027 it will be $72,384.

An “assistant manager” who spends most of the day running a register or stocking isn’t exempt because of the title. See our guide to misclassified exempt employees.

Order 7 also excludes outside salespersons, the employer’s parent, spouse or child, and national service participants, and covers government employees only for minimum wage, meals and lodging, and penalties.


Overtime under Order 7, including the commission exemption

Order 7’s overtime rules track Labor Code section 510: time and a half after 8 hours in a workday or 40 in a workweek and for the first 8 hours on the seventh consecutive day; double time after 12 hours in a day and after 8 hours on the seventh day. Salaried non-exempt employees’ regular rate is one-fortieth of their weekly salary.

Two Order 7 rules stand out:

  • Commission sales exemption (§3(D)). The overtime rules don’t apply to an employee whose earnings exceed one and one-half times the minimum wage if more than half of that employee’s compensation represents commissions. Both conditions must be met.
  • Alternative workweeks (§3(B)). Employees can adopt a schedule of up to 10 hours a day within a 40-hour week only through a two-thirds secret-ballot election, and an Order 7 alternative workweek must provide at least two consecutive days off each week. More in our guide to alternative workweeks.

💡 Example: In 2026, one and one-half times the $16.90 state minimum wage is $25.35 an hour. Marcus sells furniture, is paid weekly, and works 45 hours one week. He earns $900 in commissions plus a $300 base, $1,200 total, or about $26.67 an hour. His commissions are 75% of his pay, so the exemption can apply and no overtime is due that week. The next week he works 45 hours and earns $500 in commissions plus a $500 base: $1,000, or about $22.22 an hour, and commissions are only half his pay. The exemption fails on both counts, so the 5 overtime hours must be paid at time and a half. (Hypothetical.)

Order 7’s hours section doesn’t apply to drivers whose hours are regulated by federal or California hours-of-service rules (§3(K)).

Shifts cut short, breaks skipped, or no overtime at your store?

We can review your schedule and pay stubs and tell you what Wage Order 7 requires. Free, confidential consultation.

Meal and rest breaks for retail and wholesale workers

  • Meal periods (§11; Labor Code §512): a 30-minute meal period when you work more than 5 hours, and a second one when you work more than 10 hours. You can waive the first by mutual consent only if 6 hours completes your day, and the second only if you work no more than 12 hours and didn’t waive the first.
  • On-duty meal periods are allowed only when the nature of the work prevents relief from all duty and you agreed in writing; the agreement must say you can revoke it in writing at any time.
  • Rest periods (§12): 10 minutes of paid, net rest for every 4 hours worked or major fraction thereof, in the middle of each work period when practicable. No rest period is required if total daily work time is less than 3½ hours.
  • Premiums: one additional hour of pay at your regular rate for each workday a meal period isn’t provided, and one for each workday a rest period isn’t provided (Labor Code §226.7). Read more in California meal and rest break premiums.

If a meal period falls on a shift that begins or ends between 10 p.m. and 6 a.m., the employer must make hot food and drink (or a way to heat food) available, plus a suitable sheltered place to eat (§3(G)).


Reporting time pay and split shifts

If you report for a scheduled shift and are given no work or less than half of it, Order 7 requires pay for half the usual or scheduled day, but not less than 2 hours or more than 4 hours, at your regular rate. A second reporting in the same day with less than 2 hours of work earns 2 hours’ pay. The exceptions are narrow: threats to employees or property or a recommendation by civil authorities, a public utility failure, or an act of God or other cause outside the employer’s control (§5).

A split shift, meaning a workday interrupted by unpaid, non-working time set by the employer other than bona fide meal and rest periods, earns one hour’s pay at the minimum wage in addition to the minimum wage for that day (§4(C)). Details and examples are in our guide to split-shift and reporting time pay.

Exempt employee salary threshold of $70,304 in California in 2026

Uniforms, tools, meals and lodging

Uniforms (§9(A)). A required uniform (clothing or accessories of distinctive design or color) must be provided and maintained by the employer.

Tools and equipment (§9(B)). Required tools and equipment must be provided and maintained by the employer, except that an employee earning at least twice the minimum wage can be required to provide hand tools customarily required by the trade. No deduction is allowed for normal wear and tear. Other job expenses may be reimbursable under Labor Code §2802; see expense reimbursement in California.

Meals and lodging credits (§10). These can count toward minimum wage only under a voluntary written agreement, and only up to DIR’s published amounts. The amounts printed in Order 7 are outdated. The current figures come from the 2026 statewide minimum wage order (MW-2026):

Credit (2026, all employers)Maximum
Room occupied alone / shared$79.46 / $65.59 per week
ApartmentTwo-thirds of ordinary rental value, up to $954.43 per month
Apartment, couple both employedTwo-thirds of ordinary rental value, up to $1,411.85 per month
Breakfast / Lunch / Dinner$6.10 / $8.42 / $11.28

Cash shortages (§8). Your employer can’t deduct register shortages, breakage or lost equipment from your pay unless the loss was caused by dishonesty, a willful act or gross negligence.


The right to a seat, and other working conditions

Order 7’s seating rule has two parts. Working employees must be provided suitable seats “when the nature of the work reasonably permits the use of seats” (§14(A)). And when employees aren’t actively working and the job otherwise requires standing, enough suitable seats must be placed near the work area for them to use (§14(B)).

In Kilby v. CVS Pharmacy, Inc. (2016), a case involving a retail cashier under Order 7, the California Supreme Court held that “nature of the work” refers to the tasks performed at a given location, such as a register, not the employee’s full range of duties across the shift. Whether those tasks reasonably permit sitting is judged objectively; the employer’s business judgment and the store layout are relevant but not decisive. If the employer claims no suitable seat is available, the employer must prove it.

Order 7 also requires accurate time records (each work period’s start and end, meal periods, split-shift intervals and daily totals) kept for at least three years (§7), plus lockers, resting facilities and reasonable temperatures.


What’s out of date on the posted Order 7

The Industrial Welfare Commission was defunded in 2004, but its orders remain in effect, and DIR updates the minimum wage and meal and lodging credits each year (Labor Code §1182.13). For Order 7:

  • The printed minimum wage table (2017–2020, with separate rates for small employers) is superseded. Use $16.90 for 2026 and $17.40 for 2027, or a higher local rate (see California minimum wage by city).
  • The printed meal and lodging credits are superseded by the MW-2026 amounts above.

Where a statute gives workers more than the order (paid sick leave, pay stub requirements, final pay deadlines), the Labor Code controls.


What to do if your employer isn’t following Order 7

  1. Write down what happened: cut shifts, missed breaks, off-the-clock work, or being kept standing.
  2. Compare your pay stubs to your hours. Our wage and hour calculator can estimate overtime and premiums.
  3. If you’re paid on commission, check each pay period whether your earnings topped 1.5 times the minimum wage and whether commissions were more than half your pay. If not, overtime may be owed.
  4. Mind the deadline. Most wage claims must be filed within three years (Code of Civil Procedure §338).
  5. Talk to a wage and hour attorney about filing with the Labor Commissioner or in court; see your options compared.

Frequently asked questions

Does Wage Order 7 apply to all retail workers in California?

To most of them. Exceptions include shops run by a hotel or hospital and food businesses with customer seating (Order 5), and managers who meet an exemption test.

Are cashiers in California entitled to a seat?

If the tasks at the register reasonably permit sitting, Order 7 requires a suitable seat. Under the Kilby decision, the employer’s preference that cashiers stand is relevant but not decisive, and the employer bears the burden of proving no suitable seat is available.

Do commission salespeople get overtime under Order 7?

Not if, in that pay period, their earnings exceed 1.5 times the minimum wage and more than half their pay is commissions. If either condition isn’t met, normal overtime rules apply.

Can my store make me buy my own work shirt?

If the shirt is a required uniform of distinctive design or color, the employer must provide and maintain it. Basic clothing in a common color that isn’t a distinctive uniform is treated differently; ask a lawyer if you’re unsure.


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This article provides general information about California law and is not legal advice for any specific situation. Reading it does not create an attorney-client relationship. Past results do not guarantee a similar outcome.

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