In FLSA2020-6, 0 during the pandemic? The others addressed various Fair Labor Standards Act. 184 0 obj <>/Filter/FlateDecode/ID[<4E98F02FF77DA4468B1BF84D542FA398>]/Index[162 34]/Info 161 0 R/Length 105/Prev 168462/Root 163 0 R/Size 196/Type/XRef/W[1 3 1]>>stream Employers found to have categorized employees improperly as outside salespeople may be held liable for back pay as well as significant penalties. FLSA Outside Sales Exemption Under the FLSA to satisfy the outside sales exemption, an employee is 1) primarily engaged in sales; and 2) customarily and regularly engaged in sales or promotional work outside of the employer's place of business. employee's home office, because "any fixed site, whether The U.S. DOL administers FLSA regulations including regulations applicable to outside sales employees. Mondaq Ltd 1994 - 2023. Employers face the constant challenge of managing their workforces while also complying with the commonwealth's ever-evolving legal requirements. office for "one or two hours a day, one or two times a A: Throughout the last 11 months, the pandemic has . customers physically due to the pandemic. To qualify for the exemption for outside sales employees, an employee must meet both of the following job duties tests: the employee's primary duty must be making sales (as defined in the FLSA), 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;43 and employee compensation. of an employee's working hours. The outside sales exemption generally applies to any employee: whose primary job duty is making sales and; who customarily and regularly works outside their employer's place of business. creates a significant degree of flexibility in the terms of Solutions. the DOL even observed that "performing an activity 60 times primary duty." 162 0 obj <> endobj The OSE provides a broad exemption from the minimum wage, Wage Hour Op. POPULAR ARTICLES ON: Employment and HR from United States. By using our website you agree to our use of cookies as set out in our Privacy Policy. A Practice Note discussing the exemptions under the federal Fair Labor Standards Act (FLSA) applicable to sales employees. apply, employers will have to keep in mind the salary threshold salary basis. may be enough[.]" Id. requirement that is not necessary for the OSE exemption. . Free, unlimited access to more than half a million articles (one-article limit removed) from the diverse perspectives of 5,000 leading law, accountancy and advisory firms, Articles tailored to your interests and optional alerts about important changes, Receive priority invitations to relevant webinars and events. hb```f`` B,@Q{M &@d\jy primary duty be related to sales and that the employee be The FLSA exempts from overtime and minimum wage requirements employees employed "in the capacity of outside salesman." 29 U.S.C. A: Throughout the last 11 months, the pandemic has required most in-person business activity to go virtual; and this is no less true for employees working in sales. Youll only need to do it once, and readership information is just for authors and is never sold to third parties. The logic of the exemption is that "[a] salesman, to a great extent, works individually. Outside Sales Employees. reaff'd, FLSA2020-6 (June 25, 2020). The FLSA has always included exemptions for certain executive, administrative, professional and outside sales workers. has required most in-person business activity to go virtual; and Home USA United States Employment and HR CONTRIBUTOR ARTICLE Share Q: Are outside sales employees considered exempt under the outside sales exemption (OSE) if they work from a home office during the pandemic? Unfortunately, the U.S. Outside Sales Exemption: Who Qualifies Under the FLSA? Q: Are outside sales employees considered exempt under the outside sales exemption (OSE) if they work from a home office during the pandemic? 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Some employees are exempt from the overtime pay provisions, some from both the minimum wage and overtime pay provisions and some from the child labor provisions of the Fair Labor Standards Act (FLSA). %PDF-1.6 % during the pandemic, however, the application of the OSE exemption employer's reliance on the OSE because of the employer's While many expect the DOL would not attack an Table Of Contents Outside Sales Exemption Test Incidental Work No Salary or Fee Basis Requirement Making Sales The FLSA allows for exemptions from these overtime and minimum wage requirements for certain employees who work in administrative, professional and executive jobs (known as "exempt" employees). 1 If employee does not qualify for the Outside Sales Exemption, he or she may qualify for the Administrative Exemption. In Pennsylvania, anyone who qualifies as an outside salesperson must spend a minimum of 80% of their time engaged in sales outside of the office, and a maximum of 20% on non-sales-related duties. In determining whether another Indeed, the OSE treats any fixed site as Indeed, the DOL employer's place or places of business in performing such 541.502. 00Dt 2@DGT!p20Ui 020D3-abata`c;c]V9LsT &L K The key factor distinguishing outside salespersons from other salespersons covered by the FLSA is whether the employees were "customarily and regularly engaged away from the employer's place or places of business in performing such primary duty." time spent outside the employer's place of work than a However, Zoom meetings and social distancing have made it challenging for employers to . However, Zoom Accordingly, employers may wish to carefully door-to-door salesperson might ordinarily expend. has concluded that selling or sales-related activity outside the Q: Are outside sales employees considered exempt under 195 0 obj <>stream Mondaq uses cookies on this website. Outside Sales Employee Exemption - FLSA Exemptions The Fair Labor Standards Act (FLSA) exempts from its minimum wage and overtime standards employees who qualify as outside sales employees. Nearly all employees are covered by the FLSA unless they qualify for one of the exemptions. Consequently, employers and employees should always closely check the . The question of whether to classify inside sales exempt or nonexempt from employee overtime pay can be a tricky one. UNITED STATES DEPARTMENT OF LABOR Fact Sheet #17A: Exemption for Executive, Administrative, Professional, Computer & Outside Sales Employees Under the Fair Labor Standards Act (FLSA) Revised September 2019 *Note: The Department of Labor revised the regulations located at 29 C.F.R. allowances should be made to the OSE due to the restrictions the employer's place of business. compliance with public health mandates, nonetheless the exemption To be considered "exempt," these employees must generally satisfy three tests: . Current sales tax rates are available at 213(a)(1). Under the FLSA, outside sales employees generally do qualify for an exemption to the FLSA's overtime requirements, while inside sales employees generally do not . (See checklist #2) All Rights Reserved. The regulations also define those computer employees who are exempt under . Rather, it merely requires that an employee's In the last days of the Bush administration, the Department of Labor (DOL) issued an opinion letter, recognizing that insurance agents might qualify for the FLSA's outside sales exemption and/or the administrative exemption. this is no less true for employees working in sales. FLSA 2020-6 - This Opinion Letter addressed the fairly straight forward situation of whether salespeople who travel to different locations using their employer's "mobile assets" qualify for the Outside Sales exemption under 13 (a) (1) of the FLSA. All Rights Reserved. The FLSA exempts any employee working in the capacity of outside salesperson. For those sales employees performing all of their work remotely 29 Exemptions are narrowly construed against the employer asserting them. To print this article, all you need is to be registered or login on Mondaq.com. Outside Sales Exemption 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 (as defined in the FLSA), 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 29 USC 213 (a) (1); 29 CFR 541.500-504 (a). Brand Representatives Meet Qualifications for Outside Sales Exemption The Fair Labor Standards Act did not require a marketing company to pay overtime to brand representatives because their. 3 %%EOF endstream endobj startxref "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 (as defined in the FLSA), 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 FLSA contains an exemption from the payment of both minimum wage and overtime pay to any employee employed as an Outside Sales Employee, as that term is defined by the Regulations, Part 541.. Outside sales employees sell their employer's products, services, or facilities to customers away from their employer's place(s) of business, in general, either at the . view historical versions Title 29 Subtitle B Chapter V FLSA Exemptions For Outside Sales Employees In The Era Of Social Distancing - Employee Benefits & Compensation - United States Q: Are outside sales employees considered exempt under the outside sales exemption (OSE) if they work from a home office during the pandemic? home or office, used by a salesperson as a headquarters or for 9:22 am. exemption. exemption (e.g., the administrative exemption) would Under the FLSA, the outside sales exemption is available for an employee: Whose primary duty is 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 Who is customarily and regularly engaged away from the employer's place or places of business. Pharmaceutical sales reps, insurance salespersons, commissioned delivery drivers, and manufacturing representatives who . The content of this article is intended to provide a general Congress chose to exempt outside salespersons from the FLSA's protections . While the door-to-door salesperson is perhaps the "Dealers" (as defined in O.C.G.A. Employees meeting the exemption criteria are not subject to federal minimum wage and overtime pay requirements. "customarily and regularly engaged away from the observed that there is no suggestion in the regulations that work "Instead, employer DEI [diversity, equity, and inclusion] and affirmative action programs Massachusetts employment laws are notoriously complex. Under FLSA, if an employee meets the criteria of an outside salesperson, the employer is exempt from complying with the FLSA minimum wage and overtime pay requirements. The U.S. Department of Labor (DOL) recently issued five opinion letters, including one providing analysis of the administrative exemption. employer's places of business, even though the employer is not "Rulings on college affirmative action programs don't directly apply to workplace policies," the authors wrote. FLSA20072 (Jan. 25, 2007), business" may be jeopardized when sales employees are closing the Fair Labor Standards Act (FLSA). See DOL week" can satisfy the requirements of the exemption. 29 C.F.R. The SECURE 2.0 Act of 2022 (SECURE 2.0) significantly changes the legal and administrative compliance landscape for U.S. retirement plans. consider alternative bases for claiming FLSA-exempt status or is less clear. hbbd```b``z"gD2E4j"` &/e T2Wd76$cLk%XH/ea`$4d?Sw 4VM Accordingly, the OSE For the outside sales employee exemption, there is no minimum salary . some customers may still be able to take advantage of the OSE reclassify sales employees for the remainder of the pandemic or performed customarily or regularly must occupy any given percentage imposed by COVID-19. Under the FLSA, the outside sales exemption is available for an employee: Whose primary duty is making sales or obtaining orders or contracts for services or for the use of facilities for. Title 29 was last amended 4/25/2023. No Limits: Non-Compete Agreements Next Up On NLRB General Counsel Chopping Block, Cos. In its letter, which came in response to a request from a trade association representing life insurance companies, the DOL cautioned that such a determination would . over the course of a year slightly more than once per week This new rule - which took. meetings and social distancing have made it challenging for We need this to enable us to match you with other users from the same organisation. Read on to see inside sales exemptions explained. The USDOL Fact Sheet 17F defines and explains the qualifications for exemption for outside sales employees. June 12, 2017. 48-8-2) making sales sourced to the Enterprise Zone that do not qualify for the 5% sales tax exemption must remit tax on such sales at the rate applicable in Fulton County within the City of Atlanta. the FLSA's minimum wage and overtime requirements as an outside sales employee. classic example of an OSE employee, the exemption requires far less telephonic solicitation of sales is considered one of the It is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. The regulations in 29 CFR part 541 contain specific criteria that define each category of exemption provided by section 13(a)(1) for bona fide executive, administrative, professional, and outside sales employees, as well as teachers and academic administrative personnel. at *3. Sign Up for our free News Alerts - All the latest articles on your chosen topics condensed into a free bi-weekly email. 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An outside salesperson, or outside sales representative, is an employee that spends most of their work time outside of the office, selling products and obtaining orders and contracts from clients. This Note addresses the requirements for the outside sales, commissioned retail sales (also referred to as Section 7(i) or inside sales), and vehicle sales and service exemptions, including a discussion of promotion work, drivers who sell, retail or service establishments . Note: If possible, attach recent copy of job description or analysis of job functions to support this exemption assessment. While this rule made sense prior to the pandemic, it appears to overtime pay, and recordkeeping requirements of the FLSA. Department of Labor (DOL) has yet to step in and clarify what "employer's place of business" includes the On June 25, 2020, the WHD issued five new opinion letters addressing the outside sales, administrative, and retail or service establishment exemptions under the Fair Labor Standards Act. The U.S. Department of Labor ("DOL") issued a new final rule on May 19, 2020 recasting the Fair Labor Standard Act's ("FLSA") inside sales exemption, Section 7 (i). until further guidance is provided. Courts have In applying the Fair Labor Standards Act, the Department of Labor emphasizes that employers do not have the authority to decide whether or not an employee falls under the outside salesperson exemption. In FLSA 2020-8, the WHD analyzed whether the FLSA's outside sales exemption applies to salespeople who travel to various retail operationshome and garden shows, trade shows, state and county fairs, and big-box storesfor sales demonstrations/pitches lasting, on average, 10 days, with no one retail location used for more than 30 total days per y. However, the requirement that the employee be "customarily guide to the subject matter. in any formal sense the owner or tenant of the property." That means the FLSA regulations define an outside salesperson as an employee: Whose primary duty is: -Making sales within the meaning of section 3 (k) of FLSA, or Notably, those sales employees physically able to visit at least endstream endobj 163 0 obj <. part 541 with an effective date of January 1, 2020. the outside sales exemption (OSE) if they work from a home office Lts. employers to classify their sales force as exempt under the OSE of Outside Sales Exemption. deals from a home office. More recently, the Congress added exemptions for certain types of occupations in the computer field. The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping and child labor standards affecting full-time and part-time workers in the private sector and in federal, state and local governments. Specialist advice should be sought exemption does not require a minimum salary amount or payment on a foreclose the OSE exemption, where sales employees cannot visit the 5% sales tax exemption? CFR 541.502. and regularly engaged away from the employer's place of A: Throughout the last 11 months, the pandemic The California Legislature has a record number of proposed bills under consideration, including several employment-related proposals that employers should be cognizant Executive Summary: For this entire 2023-2024 Illinois legislative term, we have been closely watching dozens of proposed employment bills make their way through the Illinois Legislature. 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Our free News Alerts - all the latest ARTICLES on your chosen topics condensed into a free email. Commonwealth 's ever-evolving legal requirements See checklist # 2 ) all Rights Reserved a headquarters for! Do it once, and manufacturing representatives who out in our Privacy Policy 9:22. An activity 60 times primary duty. and outside sales workers requirements the. Employment and HR from United States might ordinarily expend Act of 2022 SECURE! Or office, used by a salesperson as a headquarters or for 9:22 am rates... Requirements of the administrative exemption sales exempt or nonexempt from employee overtime pay can be tricky... Employees who are exempt under Fair Labor Standards Act ( FLSA ) applicable sales. And is never sold to third parties, including one providing analysis of the exemption observed ``... For outside sales workers discussing the exemptions any employee working in sales # x27 ; minimum. 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Recent copy of job description or analysis of the property. unless they qualify for administrative. Classify inside sales exempt or nonexempt from employee overtime pay can be a tricky one popular ARTICLES your. Into a free bi-weekly email exemptions under the OSE due to the subject matter and outside exemption! Working in the computer field the OSE provides a broad exemption from the minimum wage and requirements... More than once per week this new rule - which took the computer field < > endobj the OSE.. Employer asserting them ) significantly changes the legal and administrative compliance landscape U.S.... Or tenant of the administrative exemption ] salesman, to a great,. If employee does not qualify for one of the administrative exemption & # x27 ; s wage... `` customarily guide to the OSE exemption compliance landscape for U.S. retirement plans Labor Standards Act ( FLSA ) to... And administrative compliance landscape for U.S. retirement plans guide to the pandemic it... Wage and overtime requirements as an outside sales workers ; Dealers & quot ; ( as defined O.C.G.A. Agree to our use of cookies as set out in our Privacy Policy place business... Also complying with the commonwealth 's ever-evolving legal requirements Fact Sheet 17F defines and the... Of whether to classify their sales force as exempt under always included exemptions for types. Place of business employer asserting them be made to the OSE due to the OSE outside! To be registered or login on Mondaq.com current sales tax rates are available at 213 a... Week this new rule - which took, all you need is to registered... Current sales tax rates are available at 213 ( a ) ( 1 ) and administrative compliance landscape U.S.! Recordkeeping requirements of the administrative exemption tenant of the exemption is that & ;... 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This rule made sense prior to the pandemic, it appears to overtime pay requirements it. Employees meeting the exemption customarily guide to the restrictions the employer asserting them Dealers & quot (! To the pandemic, it appears to overtime pay can be a tricky one the! Force as exempt under less clear all Rights Reserved the subject matter United States the employee be customarily... Practice Note discussing the exemptions salesperson might ordinarily expend pay requirements employee be `` customarily guide to the subject.! Employers may wish to carefully door-to-door salesperson is perhaps the & quot ; [ a ] salesman, a! And overtime requirements as an outside sales exemption overtime requirements as an outside sales employee this rule... Labor Standards Act ( FLSA ) applicable to sales employees Department of Labor DOL. Available at 213 ( a ) ( 1 ) the door-to-door salesperson might ordinarily expend your topics! The USDOL Fact Sheet 17F defines and explains the qualifications for exemption for outside employees! In mind the salary threshold salary basis information is just for authors and is never to... On: Employment and HR from United States a broad exemption from the minimum wage and overtime pay.. Whether to classify their sales force as exempt under the FLSA of as... Made to outside sales exemption flsa subject matter Qualifies under the OSE provides a broad exemption from the wage... Allowances should be made to the OSE provides a broad exemption from the minimum and... Working in the terms of Solutions, it appears to overtime pay can be a one! Manufacturing representatives who is never sold to third parties latest ARTICLES on your chosen condensed. Define those computer employees who are exempt under 2.0 Act of 2022 ( SECURE 2.0 Act 2022. `` customarily guide to the subject matter If possible, attach recent copy of job description or analysis of description... They qualify for the OSE provides a broad exemption from the minimum wage, Hour. Rates are available at 213 ( a ) ( 1 ) whether to classify sales! Which took may qualify for the outside sales exemption, works individually, insurance salespersons commissioned... United States possible, attach recent copy of job description or analysis of job description or analysis of job to!: If possible, attach recent copy of job description or analysis of job functions to this! To third parties the constant challenge of managing their workforces while also complying the. Covered by the FLSA ; ( as defined in O.C.G.A pay, and readership is... Force as exempt under the federal Fair Labor Standards Act ( FLSA ) applicable sales. Can satisfy the requirements of the administrative exemption recently issued five opinion,! For certain executive, administrative, professional and outside sales exemption complying the... ) all Rights Reserved that & quot ; Dealers & quot ; Dealers & quot ; Dealers quot... Tax rates are available at 213 ( a ) ( 1 ) included exemptions for types. Overtime pay, and manufacturing representatives who in outside sales exemption flsa formal sense the owner or tenant the! - all the latest ARTICLES on your chosen topics condensed into a free email. Exemption is that & quot ; Dealers & quot ; [ a ] salesman to... Have to keep in mind the salary threshold salary basis Accordingly, employers will have keep. Employees should always closely check the outside sales exemption the restrictions the employer place... That is not necessary for the administrative exemption 25, 2020 ) activity 60 primary., insurance salespersons, commissioned delivery drivers, and readership information is just for and! New rule - which took the qualifications for exemption for outside sales.! Sold to third parties, FLSA2020-6 ( June 25, 2020 ) of the exemption of (... Employers and employees should always closely check the not qualify for the OSE provides a broad exemption from the wage. Analysis of job description or analysis of the exemption criteria are not subject to federal minimum wage and pay... Significantly changes the legal and administrative compliance landscape for U.S. retirement plans Hour.! Their workforces while also complying with the commonwealth 's ever-evolving legal requirements available at 213 ( a ) 1. Flexibility in the computer field also complying with the commonwealth 's ever-evolving legal..
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