Outside sales employee exemptions
While most employees are owed minimum wage and overtime pay under the Fair Labor Standards Act (FLSA), there are certain positions that are exempt. Some administrative, highly compensated and outside sales positions, for example do not fall within the parameters of the FLSA.
Misclassifying a worker, however, can be a costly mistake for employers. If the Department of Labor's Wage and Hour division investigates a company and discovers its payroll practices are in violation of federal or state labor laws, the employers could face steep penalties and be ordered to pay workers back wages and damages.
To ensure an employer is properly classifying a worker correctly under the outside sales position, they can test the employees duties against the FLSA provisions:
- The employee's primary job duty must be making sales, taking orders, selling contracts for services or taking contracts for the use of a facility - including time on radio or television - and earn something similar to a commission on the sale.
- The employee works primarily - more than on occasion, but not exclusively - outside of the employer's location.
- Sales made by telephone, mail or internet do not qualify as outside sales.
Employers can be sure they are following federal and state labor laws and reduce the risk of violation by outsourcing human resources services.
Misclassifying a worker, however, can be a costly mistake for employers. If the Department of Labor's Wage and Hour division investigates a company and discovers its payroll practices are in violation of federal or state labor laws, the employers could face steep penalties and be ordered to pay workers back wages and damages.
To ensure an employer is properly classifying a worker correctly under the outside sales position, they can test the employees duties against the FLSA provisions:
- The employee's primary job duty must be making sales, taking orders, selling contracts for services or taking contracts for the use of a facility - including time on radio or television - and earn something similar to a commission on the sale.
- The employee works primarily - more than on occasion, but not exclusively - outside of the employer's location.
- Sales made by telephone, mail or internet do not qualify as outside sales.
Employers can be sure they are following federal and state labor laws and reduce the risk of violation by outsourcing human resources services.
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