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Points to Note Regarding the Outside Sales Exemption to the Fair Labor Standards Act



The Fair Labor Standards Act (“FLSA”) is a federal law that establishes minimum wage, overtime, and other employment standards that affect both the private and public sectors of employment. There are many “exemptions” within the FLSA that spare employers from the requirement that employers pay their employees minimum wage and/or overtime. If an exemption applies to an employee, then the employees are designated as “exempt.” One such exemption to the FLSA is the “outside sales” exemption.

Outside Sales Exemption Generally

To meet this exemption, employees must satisfy the following elements: (1) the employee’s primary duties must be making sales, or obtaining orders or contracts for services or for the use of facilities for which the client or customer will pay some consideration; and (2) the employee must be “customarily and regularly” engaged away from the employer’s place or places of business.

Definitions Applicable to the Exemption

The U.S. Department of Labor (“DOL”), Wage and Hour Division (“WHD”) enforces various federal laws, including the FLSA. In doing so, the DOL often creates and issues Fact Sheets that assist in understanding the purpose and applicability of the federal laws they enforce. Below are key definitions and/or explanations applicable to the FLSA’s “outside sales” exemption:

  • Primary Duty: the principal, main, major, or most important duty an employee performs, the determination of which is based upon all facts in that particular case, with a significant emphasis placed upon the character of the employee’s job as a whole.
  • Making Sales: includes any sale, exchange, contract to sell, consignment for sales, shipment for sale, or other disposition, as well as the transfer of title to tangible property and, sometimes, of tangible and valuable evidences of tangible property.
  • Obtaining Orders or Contracts for Services or 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 or other transportation agencies.
  • Customarily or Regularly: greater than occasional but less than constant, including work normally done every workweek, but not isolated or one-time tasks.

Away from Employer’s Place of Business: means making sales at a customer’s place of business or home if going door-to-door. This does not include sales the employee makes by mail, telephone, or the Internet unless such is used in addition to personal calls. Furthermore, any fixed location, whether an employee’s home or office, used by a salesperson as headquarters for making sales by telephone is considered one of the employer’s places of business, regardless of ownership.

If you feel your employments rights under the Fair Labor Standards Act have been violated, or if you have any other questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Michel | King. You can contact us either online or by calling us at (205) 319-9724. We are here to serve you.

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