Michael L. Dodd, Esq.Are you sure that your company’s sales staff are properly categorized as exempt from the overtime requirements of the Fair Labor Standards Act (FLSA)?
The FLSA regulations make it clear that the exemption only applies to “outside sales” staff. To qualify for the outside sales employee exemption, the employee’s “primary duty” (defined below) must involve making sales at the customer’s place of business. Outside sales does not include sales made by mail, telephone or the Internet unless such contact is used merely as an adjunct to in-person 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.
The phrase “primary duty” means the principal, main, major or most important duty that the employee performs. Determination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole. However, the amount of time spent performing exempt work can be a useful guide in determining whether it is the primary duty of an employee.
As a general rule, employees who spend more than 50 percent of their time making sales at the customer’s place of business will generally satisfy the primary duty requirement for an outside salesperson. But remember, time alone is not the sole test.
