Overtime exemptions don't apply to all salespeople
While the Fair Labor Standards Act provides a number of exemptions for the payment of overtime to sales workers, employers may still have a liability for extra pay.
A recent article in The Northern Colorado Business Report urges business owners and managers to be careful when exempting salespeople from overtime. Because there is no blanket sales exemption, at least one of the FLSA's set of standards must be met before an employer can safely remove an employee's eligibility for extra pay when working more than 40 hours a week.
The two major overtime disqualifications are for commission-based employees and outside salespeople.
Commissioned employees, according to the Department of Labor, must work in a service or retail facility that has at least 75 percent of total sales in dollars go to end users, customarily earn at least one-and-a-half times the prevailing minimum wage and have more than half of all earnings come from commissioned sales, on average.
The Department of Labor removes overtime requirements for outside salespeople only if they make sales or acquire contracts as their main duty and usually do that work away from a central office.
Employee management software can keep track of hours worked and earnings per period. This software helps managers comply with the sometimes complicated rules for overtime exemptions.
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