Outside Sales Exemption

Distinguishing Between Salespersons for Overtime Purposes

Tennessee wage and hour lawyers protect your rights when an outside sales exemption is misused in Nashville, Chattanooga, Memphis, and Jackson

The advent of personal computers and widespread use of the Internet, email, and electronic banking services during the last two decades of the 20th century have brought about dramatic changes in the ways in which retail sales can be conducted. For example, enormous volumes of sales are transacted by organizations in which presenters demonstrate products on live television to create demand for them while a large staff of order-takers receives orders for them by telephone and processes them by computer. There is no need for the demonstrators or order-takers to be located anywhere near the companies’ offices. For that matter, they may even be located in different states. One might ask: “In such sales arrangements, who is legitimately an ‘outside salesperson’ for Fair Labor Standards Act (FLSA) purposes?” Judging from the DOL’s interpretive bulletins, the answer appears to be “None.”

If you are engaged in Internet- or telephone-based sales solicitations made from a location away from your employer’s offices, you may still not meet the criteria for exemption. If you do not, your employer may be required to pay you overtime compensation for hours worked in excess of forty per week. This kind of misclassification can happen easily, given today’s technology. If you are engaged in sales work but are currently ineligible for overtime pay, and if you think the duties of your position should make you eligible for overtime pay, you should talk with a Tennessee wage and hour attorney at Gilbert Russell McWherter Scott Bobbitt, PLC.

What are the DOL’s criteria for an Outside Sales Exemption?

For employee to qualify for the Outside Sales exemption from overtime, the Wage and Hour Division of the United States Department of Labor (DOL) requires that both of the following criteria be met:

  • “Their 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
  • They must be customarily and regularly engaged away from the employer’s place or places of business.”

There is no minimum salary requirement.

What are some of the DOL’s interpretations of the exemption criteria?

“Outside sales” means sales made personally at a customer’s place of business. These do not include sales made by mail, telephone, or the Internet unless those facilities were used as an adjunct to personal calls.

In addition, “any fixed site, whether home or office, used by a salesperson as a headquarters or for telephone solicitation of sales is considered one of the employer’s places of business,” even if the employer is not an owner or tenant of the property.

Assistance for outside salespeople in Tennessee who may be victims of a wage and hour violation 

The Gilbert Firm’s attorneys have built a solid reputation in Tennessee as employment law advocates and have handled FLSA cases across the Southeast and beyond. . If you believe you are wrongfully exempted from overtime pay by having been misclassified in “Outside Sales” we want to hear from you. Please call 888.354.FIRM (3476) to discuss your complaint with an experienced Tennessee wage and hour lawyer, or fill out our contact form to schedule a free, no-obligation consultation. Our offices are conveniently located in Nashville, Chattanooga, Memphis, and Jackson.

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