As the achievement says you have to sleep for more than 1 hour.
Here are a few pointers.
1. This only applies to any place where you have to press the interact button to sleep.
2. The total time slept it cumulative. I had the cat sleep 20 minutes in The Slums and 40 minutes in Antvillage to test this.
3. If you disable the "Pause on Focus Lost" setting you can still obtain the achievement while doing other things.