Exempt versus Non-Exempt Employees: The Outside Salespersons Exemption
Under both state and federal law, an outside salesperson is exempt from the minimum wage and overtime requirements if he or she:
- Is employed for the purpose of selling tangible or intangible items, or obtaining orders or contracts for services or use of facilities;
- Customarily and regularly works away from the employer’s place of business; and
- The employee’s hours of work devoted to tasks other than those described above do not exceed 20% of the hours worked by non-exempt employees. Work performed incidental to and in conjunction with the employee’s own outside sales or solicitations, including incidental deliveries and collections, are not regarded as nonexempt work.
There are no minimum salary requirements for outside salespersons.
Inside salespersons are not covered by this exemption.
There is an exception from overtime pay under Connecticut law for inside salespersons if their sole duty is to sell a product or service and all of the following criteria are met for the pay week: (1) their regular rate of pay is in excess of two times the minimum hourly wage; (2) more than half of their compensation for a representative period (one month or more) represents commissions on goods or services; and (3) they do not work more than 54 hours during a work week of seven consecutive calendar days.
There is no similar exception under the federal law, however. A salesperson who works primarily in-house will be non-exempt under the FLSA, unless he or she qualifies for one of the other exemptions discussed previously.
In addition, employees in positions such as drivers and customer service representatives who do not spend the majority of their time performing sales work likely will be considered non-exempt, notwithstanding the fact that they may work away from the employer’s place of business most of the time.
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