FairPay Fact Sheet by Exemption Under the Fair Labor Standards Act (FLSA)
Fact Sheet #17F: Exemption for Outside Sales Employees Under the Fair Labor Standards Act (FLSA)
This fact sheet provides general information on the exemption from minimum wage and overtime pay provided by Section 13(a)(1) of the Fair Labor Standards Act as defined by Regulations, 29 CFR Part 541.
The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.
However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. Section 13(a)(1) and Section 13(a)(17) also exempt certain computer employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week, although the salary requirements do not apply to outside sales employees. Job titles do not determine exempt status. In order for an exemption to apply, an employees specific job duties and salary must meet all the requirements of the Departments regulations.
See other fact sheets in this series for more information on the exemptions for executive, administrative, professional, and computer employees, and for more information on the salary basis requirement.
To qualify for the outside sales employee exemption, all of the following tests must be met:
The salary requirements of the regulation do not apply to the outside sales exemption. An employee who does not satisfy the requirements of the outside sales exemption may still qualify as an exempt employee under one of the other exemptions allowed by Section 13(a)(1) of the FLSA and the Part 541 regulations if all the criteria for the exemption is met.
Primary duty means the principal, main, major or most important duty that the employee performs. Determination of an employees primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employees job as a whole.
Sales includes any sale, exchange, contract to sell, consignment for sales, shipment for sale, or other disposition. It includes the transfer of title to tangible property, and in certain cases, of tangible and valuable evidences of intangible property.
Obtaining Orders or Contracts for Services or for the Use of Facilities
Obtaining orders for the use of facilities includes the selling of time on radio or television, the solicitation of advertising for newspapers and other periodicals, and the solicitation of freight for railroads and other transportation agencies. The word services extends the exemption to employees who sell or take orders for a service, which may be performed for the customer by someone other than the person taking the order.
The phrase customarily and regularly means greater than occasional but less than constant; it includes work normally done every workweek, but does not include isolated or one-time tasks.
Away from Employers Place of Business
An outside sales employee makes sales at the customers place of business, or, if selling door-to-door, at the customers 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 employers places of business, even though the employer is not in any formal sense the owner or tenant of the property.
Promotion work may or may not be exempt outside sales work, depending upon the circumstances under which it is performed. Promotional work that is actually performed incidental to and in conjunction with an employees own outside sales or solicitations is exempt work. However, promotion work that is incidental to sales made, or to be made, by someone else is not exempt outside sales work.
Drivers who deliver products and also sell such products may qualify as exempt outside sales employees only if the employee has a primary duty of making sales. Several factors should be considered in determining whether a driver has a primary duty of making sales, including a comparison of the drivers duties with those of other employees engaged as drivers and as salespersons, the presence or absence of customary or contractual arrangements concerning amounts of products to be delivered, whether or not the driver has a selling or solicitors license when required by law, the description of the employees occupation in collective bargaining agreements, and other factors set forth in the regulation.
Where to Obtain Additional Information
The Department of Labor provides this information to enhance public access to information on its programs. This publication is for general information and is not to be considered in the same light as official statements of position contained in the regulations.
For more information regarding the FLSA, visit the Wage and Hour Divisions Web site at www.wagehour.dol.gov or call our toll-free help line, available from 8 a.m. to 5 p.m. in your time zone, at 1-866-4US-WAGE (1-866-487-9243).
Copies of Wage and Hour publications also may be obtained from any office of the Wage and Hour Division. To locate the nearest Wage and Hour Division office, telephone the toll-free help line or visit our Web site for a complete listing of offices.
When the state laws differ from the federal FLSA, an employer must comply with the standard most protective to employees. Links to your state labor department can be found at www.dol.gov/esa/contacts/state_of.htm.