Are pharmaceutical sales representatives exempt from overtime pay?
Pharmaceutical companies might soon begin keeping more detailed records of their payroll following a rise in employee lawsuits that have raised questions about overtime pay exemption under the Fair Labor Standards Act (FLSA). Pharmaceutical sales representatives have come forth, claiming they were wrongly denied premium pay (time-and-a-half) for overtime employee attendance because they were classified as administrative or outside sales workers.
Sales reps for Eli Lilly & Co, Abbott Laboratories, GlaxoSmithKline and now Otsuka America Pharmaceuticals have all filed claims to reclaim back wages for unpaid overtime. The U.S. Court of Appeals for the 7th Circuit recently tried the Eli Lilly and Abbott Laboratories cases and found employees were exempt under the FLSA as administrative employees.
GlaxoSmithKline and Otsuka America Pharmaceuticals are still waiting to find out if their practice of classifying sales representatives as outside sales workers is in line with the FLSA. Otsuka employees claim they were regularly required to work more than 40 hours in a week and were never compensated for their time attendance.
To be considered an outside sales employee, the workers must regularly be making sales, securing contracts of obtaining orders on behalf of the employer, and those duties must primarily take place away from the place of business. Pharmaceutical reps have come into question because they are not actually making sales for pharmaceuticals because they are not medical doctors.
Employers who are unsure about their method of classifying workers might benefit from outsourcing human resources so they can gain expert knowledge about what is required by the FLSA.
Sales reps for Eli Lilly & Co, Abbott Laboratories, GlaxoSmithKline and now Otsuka America Pharmaceuticals have all filed claims to reclaim back wages for unpaid overtime. The U.S. Court of Appeals for the 7th Circuit recently tried the Eli Lilly and Abbott Laboratories cases and found employees were exempt under the FLSA as administrative employees.
GlaxoSmithKline and Otsuka America Pharmaceuticals are still waiting to find out if their practice of classifying sales representatives as outside sales workers is in line with the FLSA. Otsuka employees claim they were regularly required to work more than 40 hours in a week and were never compensated for their time attendance.
To be considered an outside sales employee, the workers must regularly be making sales, securing contracts of obtaining orders on behalf of the employer, and those duties must primarily take place away from the place of business. Pharmaceutical reps have come into question because they are not actually making sales for pharmaceuticals because they are not medical doctors.
Employers who are unsure about their method of classifying workers might benefit from outsourcing human resources so they can gain expert knowledge about what is required by the FLSA.
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