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Outside Sales Exemption

Exempt employees & outside sales employee exemption

The Fair Labor Standards Act 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, federal employment law provides that certain types of employees (exempt employees) don’t need to be paid minimum wage or overtime. One of these exemptions is the outside sales exemption.

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What is the federal outside sales employee exemption?

Under federal law, for an employer to classify an employee as exempt under the outside sales employee exemption, the employee must:

  • Have a primary duty of making sales or obtaining orders or contracts for services
  • Spend most of their time away from the employer's offices or place of business.

There are different exemption requirements for employees under federal and state employment laws. (Learn more about the California outside sales employee exemption.)

Commonly misclassified employees under the outside sales exemption

Employees who are commonly misclassified as exempt under the outside sales exemption include:

  • Pharmaceutical sales representatives
  • Insurance salespersons
  • Commissioned delivey drivers
  • Manufacturer's representatives that do marketing and merchandising at retail stores

Are you misclassified as an outside sales employee?

Think you are misclassifed as exempt? Free and confidential evaluations are available with our employment attorneys by calling (866) 981-4800 or by filling out the form to the right.

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