Many salespeople are paid by commission only and are not paid overtime or any other wages. This is only permitted if the salesperson qualifies under an FLSA exemption. There are several exemptions from the FLSA such as executive, administrative, outside sales person and highly compensated employee in which an employer does not have to comply with the overtime and/or minimum wage requirement.
To qualify for the outside sales employee exemption, all of the following tests must be met
-The employee’s primary duty must be making sales or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
-The employee must be customarily and regularly engaged away from the employer’s place or places of business.
Many sales people are misclassified because they do not meet the requirement that the employee be “away from the employer’s place of business.”
An outside sales employee makes sales at the customer’s place of business, or, if selling door-to-door, at the customer’s home. Outside sales does not include sales made by mail, telephone or the Internet unless such contact is used merely as an adjunct to personal calls. Any fixed site, whether home or office, used by a salesperson as a headquarters or for telephonic solicitation of sales is considered one of the employer’s places of business, even though the employer is not in any formal sense the owner or tenant of the property.
The takeaway here is that if you are a sales person and you are not out on the road for a portion of the week meeting with customers or working on sales, you may be entitled to overtime and an hourly pay rate. You should seek out experienced unpaid wages lawyers.
