Overtime Laws

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Exemption for Outside Sales Employees

Employees who fall within the “outside sales employee” exemption are exempt from both the minimum wage and overtime pay requirements under the FLSA. In order to satisfy this exemption, several requirements must all be met:

First, the employee’s primary duty is making sales, obtaining orders or contracts for services, or obtaining contracts for use of facilities for which consideration will be paid. Primary duty means the employee’s main, principal, or most important duty performed. This determination is made when viewing the totality of circumstances—examining the employee’s job as a whole.

“Sales” is defined under the Act to include a “sale, exchange, contract to sell, consignment for sales, shipment for sale, or other disposition,” and including the “transfer of title to tangible property, and in certain cases, of tangible and valuable evidences of intangible property.”

Second, the employee is customarily and regularly (i.e., not isolated or only occasional tasks, but less than constant or continual duties) working away from the employer’s place of business.

If all requirements of outside sales employee exemption are satisfied, the employee is considered “exempt” from the overtime and minimum wage laws of the FLSA.

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