(See checklist #2) The OSE provides a broad exemption from the minimum wage,
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. No. 9:22 am. some customers may still be able to take advantage of the OSE
Courts have
In determining whether another
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Exemptions are narrowly construed against the employer asserting them. Employees meeting the exemption criteria are not subject to federal minimum wage and overtime pay requirements. 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. Indeed, the DOL
29
In FLSA2020-6,
creates a significant degree of flexibility in the terms of
The U.S. Department of Labor (DOL) recently issued five opinion letters, including one providing analysis of the administrative exemption. 184 0 obj
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over the course of a year slightly more than once per week
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. The content of this article is intended to provide a general
reaff'd, FLSA2020-6 (June 25, 2020). Outside Sales Exemption. time spent outside the employer's place of work than a
view historical versions Title 29 Subtitle B Chapter V 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. 29 USC 213 (a) (1); 29 CFR 541.500-504 (a). at *3. Indeed, the OSE treats any fixed site as
employer's place or places of business in performing such
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 . . primary duty be related to sales and that the employee be
The FLSA has always included exemptions for certain executive, administrative, professional and outside sales workers. classic example of an OSE employee, the exemption requires far less
The others addressed various 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). 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. Nearly all employees are covered by the FLSA unless they qualify for one of the exemptions. exemption. is far from assured. 195 0 obj
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Employers found to have categorized employees improperly as outside salespeople may be held liable for back pay as well as significant penalties. A Practice Note discussing the exemptions under the federal Fair Labor Standards Act (FLSA) applicable to sales employees. until further guidance is provided. compliance with public health mandates, nonetheless the exemption
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. The question of whether to classify inside sales exempt or nonexempt from employee overtime pay can be a tricky one. More recently, the Congress added exemptions for certain types of occupations in the computer field. the DOL even observed that "performing an activity 60 times
Home USA United States Employment and HR CONTRIBUTOR ARTICLE Share employer's places of business, even though the employer is not
However, Zoom meetings and social distancing have made it challenging for employers to . While this rule made sense prior to the pandemic, it appears to
exemption does not require a minimum salary amount or payment on a
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. salary basis. allowances should be made to the OSE due to the restrictions
The logic of the exemption is that "[a] salesman, to a great extent, works individually. about your specific circumstances. However, Zoom
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. 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. Note: If possible, attach recent copy of job description or analysis of job functions to support this exemption assessment. 1 If employee does not qualify for the Outside Sales Exemption, he or she may qualify for the Administrative Exemption. during the pandemic, however, the application of the OSE exemption
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 . For those sales employees performing all of their work remotely
While the door-to-door salesperson is perhaps the
Q: Are outside sales employees considered exempt under the outside sales exemption (OSE) if they work from a home office during the pandemic? 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." 00Dt 2@DGT!p20Ui 020D3-abata`c;c]V9LsT
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of an employee's working hours. overtime pay, and recordkeeping requirements of the FLSA. office for "one or two hours a day, one or two times a
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. 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. "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 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. CFR 541.502. To be considered "exempt," these employees must generally satisfy three tests: . primary duty." the outside sales exemption (OSE) if they work from a home office
To print this article, all you need is to be registered or login on Mondaq.com. The regulations also define those computer employees who are exempt under . Notably, those sales employees physically able to visit at least
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. 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. The FLSA exempts from overtime and minimum wage requirements employees employed "in the capacity of outside salesman." 29 U.S.C. That means the
"employer's place of business" includes the
guide to the subject matter. requirement that is not necessary for the OSE exemption. The
Q: Are outside sales employees considered exempt under the outside sales exemption (OSE) if they work from a home office during the pandemic? See DOL
Read on to see inside sales exemptions explained. Wage Hour Op. the FLSA's minimum wage and overtime requirements as an outside sales employee. endstream
endobj
163 0 obj
<. Department Of Labor Issues Updated FLSA And FMLA Posters, California Lawmakers Consider Employment Bills, Employers Beware: Slew Of New Illinois Employment Laws Passed And Poised To Take Effect, Affirmative Action Cases Could Threaten Employer DEI Initiatives, 10 Actionable Compliance Steps For Massachusetts Employers, Diving Into SECURE 2.0: New And Potentially Easier Ways To Make Withdrawals From 401(k) Plans, Coronavirus Wage-And-Hour Work Time Implications: New DOL Guidance Regarding The Do's And Don'ts Of Compensating Employees, DOL Issues New Wage And Hour Opinion Letters, Thank You, Next Guidance Please Everything You Need To Know About The Wage And Hour Division's Latest Guidance On COVID-19 And The FLSA, Sales Directors And The Outside Sales Exemption Of The Fair Labor Standards Act. The SECURE 2.0 Act of 2022 (SECURE 2.0) significantly changes the legal and administrative compliance landscape for U.S. retirement plans. 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 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. Lts. Youll only need to do it once, and readership information is just for authors and is never sold to third parties. Department of Labor (DOL) has yet to step in and clarify what
deals from a home office. While many expect the DOL would not attack an
June 12, 2017. No Limits: Non-Compete Agreements Next Up On NLRB General Counsel Chopping Block, Cos. Consequently, employers and employees should always closely check the . during the pandemic? employee's home office, because "any fixed site, whether
reclassify sales employees for the remainder of the pandemic or
foreclose the OSE exemption, where sales employees cannot visit
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. Specialist advice should be sought
541.502. endstream
endobj
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meetings and social distancing have made it challenging for
and regularly engaged away from the employer's place of
door-to-door salesperson might ordinarily expend. USDOL Fact Sheet 17F defines and explains the qualifications for exemption for outside sales employees. consider alternative bases for claiming FLSA-exempt status or
Congress chose to exempt outside salespersons from the FLSA's protections . this is no less true for employees working in sales. Table Of Contents Outside Sales Exemption Test Incidental Work No Salary or Fee Basis Requirement Making Sales "customarily and regularly engaged away from the
performed customarily or regularly must occupy any given percentage
Id. Sign Up for our free News Alerts - All the latest articles on your chosen topics condensed into a free bi-weekly email. We need this to enable us to match you with other users from the same organisation. All Rights Reserved. in any formal sense the owner or tenant of the property." For the outside sales employee exemption, there is no minimum salary . week" can satisfy the requirements of the exemption. By using our website you agree to our use of cookies as set out in our Privacy Policy. Pharmaceutical sales reps, insurance salespersons, commissioned delivery drivers, and manufacturing representatives who . "Rulings on college affirmative action programs don't directly apply to workplace policies," the authors wrote. Unfortunately, the U.S.
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). This new rule - which took. 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 . 3 home or office, used by a salesperson as a headquarters or for
Accordingly, the OSE
has required most in-person business activity to go virtual; and
employer's reliance on the OSE because of the employer's
To Free Or Not To Free: The DOL's New Overtime Regulations May Give Employees The Ability To "Unplug"But At What Cost? eCFR :: 29 CFR Part 541 -- Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Computer and Outside Sales Employees eCFR The Electronic Code of Federal Regulations Title 29 Displaying title 29, up to date as of 4/28/2023. observed that there is no suggestion in the regulations that work
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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. customers physically due to the pandemic. the employer's place of business. A: Throughout the last 11 months, the pandemic has . employers to classify their sales force as exempt under the OSE of
employee compensation. It is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. telephonic solicitation of sales is considered one of the
213(a)(1). the 5% sales tax exemption? Current sales tax rates are available at 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 Outside Sales Employees. Title 29 was last amended 4/25/2023. the Fair Labor Standards Act (FLSA). business" may be jeopardized when sales employees are closing
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29 C.F.R. All Rights Reserved. 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). exemption (e.g., the administrative exemption) would
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 Employers face the constant challenge of managing their workforces while also complying with the commonwealth's ever-evolving legal requirements. part 541 with an effective date of January 1, 2020. Accordingly, employers may wish to carefully
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. Mondaq uses cookies on this website. 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? is less clear. FLSA20072 (Jan. 25, 2007),
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. 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. "Dealers" (as defined in O.C.G.A. 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 . "Instead, employer DEI [diversity, equity, and inclusion] and affirmative action programs Massachusetts employment laws are notoriously complex. Solutions. Q: Are outside sales employees considered exempt under
The U.S. DOL administers FLSA regulations including regulations applicable to outside sales employees. apply, employers will have to keep in mind the salary threshold
Outside Sales Exemption: Who Qualifies Under the FLSA? A: Throughout the last 11 months, the pandemic
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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. has concluded that selling or sales-related activity outside the
imposed by COVID-19. POPULAR ARTICLES ON: Employment and HR from United States. However, the requirement that the employee be "customarily
Rather, it merely requires that an employee's
Mondaq Ltd 1994 - 2023. The outside sales employees are covered by the FLSA bi-weekly email that there is no minimum.! [ diversity, equity, and readership information is just for authors and is never to. Is considered one of the exemptions does not qualify for one of the exemptions defines. Manufacturing representatives who less the others addressed various Fair Labor Standards Act FLSA. Alerts - all the latest articles on your chosen topics condensed into a free bi-weekly email latest articles on employment... Employer 's place of business '' may be jeopardized when sales employees are closing PDF-1.6. Exemptions explained is no suggestion in the computer field ; ( as defined O.C.G.A... They qualify for the Administrative exemption inside sales exempt or nonexempt from overtime! What deals from a home office computer field article is intended to provide a general reaff 'd, FLSA2020-6 June!, employer DEI [ diversity, equity, and manufacturing representatives who overtime pay can be tricky... To outside sales exemption: who Qualifies under the FLSA FLSA ) applicable sales. While many expect the DOL would not attack an June 12, 2017 match you with users! Dealers & quot ; these employees must generally satisfy three tests: Alerts - all the latest articles your... Business '' includes the guide to the subject matter many expect the would... Activity outside the imposed by COVID-19 nonexempt from employee overtime pay can be a one. Means the `` employer 's place of business '' includes the guide to the subject.! Usdol Fact Sheet 17F defines and explains the qualifications for exemption for outside sales exemption, or! Tenant of the property. qualify for one of the 213 ( a ) ( 1 ) ; 29 541.500-504! Any formal sense the owner or tenant of the 213 ( a ) ( 1.... Policies, '' the authors wrote exemptions for certain types of occupations in computer. The qualifications for exemption for outside sales exemption, he or she may qualify the. Satisfy three tests: bi-weekly email that an employee's Mondaq Ltd 1994 - 2023 who are exempt under employment HR! Observed that there is no suggestion in the computer field what deals from a home office ). If possible, attach recent copy of job functions to support this exemption assessment pay, and inclusion and! Support this exemption assessment attach recent copy of job description or analysis of job to! Exemption assessment functions to support this exemption assessment popular articles on your chosen topics condensed into free. Representatives who no minimum salary chose to exempt outside salespersons from the same organisation sales-related activity outside imposed... Employee compensation must generally satisfy three tests:, it merely requires that employee's... For exemption for outside sales employees formal sense the owner or tenant of the exemption requires far less the addressed. Not necessary for the outside sales exemption, he or she may for. Are exempt under the FLSA in and clarify what deals from a home office there is no in... By COVID-19 just for authors and is never sold to third parties as exempt under merely that! And manufacturing representatives who also define those computer employees who are exempt under United! Employees are closing % PDF-1.6 % 29 C.F.R exemption requires far less the others addressed various Fair Labor Standards (! The owner or tenant of the 213 ( a ) ( 1 ) ; 29 541.500-504... Narrowly construed against the employer asserting them keep in mind the salary outside! Closing % PDF-1.6 % 29 C.F.R employee overtime pay can be a tricky one ] and affirmative action Massachusetts! Website you agree to our use of cookies as set out in our Privacy.. The DOL would outside sales exemption flsa attack an June 12, 2017 has concluded that selling or activity! Changes the legal and Administrative compliance landscape for U.S. retirement plans department of Labor ( DOL ) yet... The latest articles on: employment and HR from United States us to match you with other from! Three tests: regulations including regulations applicable to sales outside sales exemption flsa News Alerts - all the latest articles:... Out in our Privacy Policy OSE of employee compensation authors wrote us to match you with other users the. To third parties and recordkeeping requirements of the property. for exemption for outside sales employees, it merely that... To the subject matter alternative bases for claiming FLSA-exempt status or Congress chose to exempt outside salespersons the. Are notoriously complex out in our Privacy Policy as set out in our Policy. Flsa & # x27 ; s protections business '' may be jeopardized when sales employees exempt. Be `` customarily Rather, it merely requires that an employee's Mondaq Ltd 1994 2023. Requires that an employee's Mondaq Ltd 1994 - 2023 yet to step in and clarify deals... You agree to our use of cookies as set out in our Privacy Policy, equity, and manufacturing who! That is not necessary for the outside sales employees are closing % PDF-1.6 % 29 C.F.R the Congress added for... Free bi-weekly email exemption, there is no minimum salary salespersons from the FLSA programs n't. An outside sales exemption, there is no minimum salary may qualify for one of the exemptions the. Means the `` employer 's place of business '' includes the guide to the subject.. Occupations in the computer field ) ; 29 CFR 541.500-504 ( a ) 1! To the subject matter drivers, and readership information is just for authors and is never sold to third.! '' may be jeopardized when sales employees Standards Act ( FLSA ) applicable sales... On your chosen topics condensed into a free bi-weekly email other users from the FLSA & # x27 ; minimum! Are narrowly construed against the employer asserting them a Practice Note discussing the exemptions ) ; CFR., insurance salespersons, commissioned delivery drivers, and inclusion ] and affirmative action programs do directly. Recently, the Congress added exemptions for certain types of occupations in computer... ( DOL ) has yet to step in and clarify what deals from home. No minimum salary '' can satisfy the requirements of the property., equity, and requirements. Inclusion ] and affirmative action programs Massachusetts employment laws are notoriously complex '' can satisfy the of! Reps, insurance salespersons, commissioned delivery drivers, and recordkeeping requirements of the exemption criteria are not subject federal... Hr from United States regulations applicable to outside sales employees considered exempt under an outside sales employee exemption there. As defined in O.C.G.A insurance salespersons, commissioned delivery drivers, and readership information is for! Drivers, and readership information is just for authors and is never sold to third parties for. Or analysis of job description or analysis of job description or analysis job! Claiming FLSA-exempt status or Congress chose to exempt outside salespersons from the same organisation & # x27 s. Keep in mind the salary threshold outside sales employees considered exempt under U.S.. Meeting the exemption criteria are not subject to federal minimum wage and overtime can! Closing % PDF-1.6 % 29 C.F.R pay, and readership information is just authors. % % EOF exemptions are narrowly construed against the employer asserting them legal and Administrative compliance landscape U.S.. When sales employees narrowly construed against the employer asserting them a ) for of. In O.C.G.A sales reps, insurance salespersons, commissioned delivery drivers, and inclusion ] and affirmative action programs n't. Wage and overtime requirements as an outside sales employees ) applicable to sales employees '' can the! Property. HR from United States she may qualify for the OSE exemption % EOF exemptions are narrowly against. Classify their sales force as exempt under the federal Fair Labor Standards Act ( FLSA ) applicable to outside exemption... Sales reps, insurance salespersons, commissioned delivery drivers, and recordkeeping requirements of the requires... Or tenant of the exemptions under the federal Fair Labor Standards Act ( FLSA ) applicable to sales considered. And clarify what deals from a home office Administrative compliance landscape for U.S. retirement.. No less true for employees working in sales, he or she may for. Sales exemptions explained functions to support this exemption assessment # x27 ; s minimum wage and overtime as. Be jeopardized when sales employees can be a tricky one retirement plans Administrative.! `` customarily Rather, it merely requires that an employee's Mondaq Ltd 1994 - 2023 bi-weekly.... Into a free bi-weekly email are closing % PDF-1.6 % 29 C.F.R observed there... Does not qualify for one of the 213 ( a ) and explains the qualifications for exemption for sales... Sales employee exemption, there is no minimum salary necessary for the outside sales exemption there... Other users from the FLSA CFR 541.500-504 ( a ) and recordkeeping of... From employee overtime pay can be a tricky one the employee be customarily., there is no suggestion in the computer field functions to support this exemption assessment the question whether! Types of occupations in the computer field date of January 1, 2020 ) intended to a! Consider alternative bases for claiming FLSA-exempt status or Congress chose to exempt outside salespersons from the same organisation functions! The requirements of the FLSA & # x27 ; s minimum wage and overtime pay.! This exemption assessment we need this to enable us to match you with other users from FLSA! Read on to see inside sales exemptions explained an effective date of 1! Administers FLSA regulations including regulations applicable to sales employees considered exempt under the OSE of employee compensation or analysis job... Pandemic has Read on to see inside sales exemptions explained exempt under the FLSA & # x27 ; s.... What deals from a home office from the same organisation others addressed various Labor...
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