In the classic Thanksgiving film Planes, Trains, and Automobiles, Steve Martin’s character meets Del Griffith, a salesman played by John Candy, at an airport. In fact, Del is the director of sales, shower curtain ring division for American Light & Fixture. He works hard at his job and he is good at it. In one particularly memorable scene, he sells a bunch of shower curtain rings to various people by pitching them as earrings from the likes of Walter Cronkite, Diane Sawyer, Darryl Strawberry, and the “Grand Wizard of China back in the fourth century.”
Since he spends all of his time outside the office and traveling the country selling shower curtain rings, he certainly must put in a lot of overtime. Under the Fair Labor Standards, any hours over forty that a covered employee works must be compensated at 1.5 times the regular rate of pay. Unfortunately, Del does not receive any benefit from the FLSA because he is not a covered employee. Under the Outside Sales Exemption, Del is exempt from both the FLSA’s minimum wage requirements and overtime pay requirements.
So what is the Outside Sales Exemption? The Outside Sales Exemption exempts certain kinds of salespeople from the minimum wage and overtime requirements of the FLSA. In order for an employee to be considered an outside sales employee, the employee’s primary duty is making sales or obtaining orders/contracts from customers away from the employer’s place of business. The classic example of outside salespeople are the door-to-door salesmen of yore, knocking on your door to sell vacuums, books, knives, and, in Del’s case, shower curtain rings. It might seem silly to note, but the term “outside salesperson” does not necessarily mean that covers any salespersons working the open air. For example, a Christmas tree salesperson works outside, but would not be considered an outside salesperson under the FLSA. The term outside refers to being a way from the employer’s place of business. That’s why a Christmas tree salesperson would not be an outside salesperson. The Christmas tree salesperson is selling trees to customers on the Christmas tree lot, which is the employer’s place of business. Likewise, a salesperson making calls form a call center would not be an outside salesman because that person is making the calls from the employer’s place of business.
While outside sales must be the “primary duty” it does not have to be the only duty. As defined in the regulations, “primary duty” just means the “principal, main, major, or most important duty that an employee performs.” 29 C.F.R. § 541.700(a). Moreover, an employee may be exempt even if that employee spends less than 50% of their time performing the primary duty. According to the regulations, employees who spend more than 50% of their time doing exempt work will generally be exempt, but “nothing . . . requires that exempt employees spend more than 50 percent of their time performing exempt work.” 29 C.F.R. § 541.700(b). The example the regulations provide is of a manager who directs and supervises employees maybe exempt even if that manager spends most of their time running the cash register, which is non-exempt work. That is because their most important duty is management. In the outside sales context, that means that even if a salesperson spends a significant amount of time creating itineraries for travel, filling out reports, updating catalogues, or making deliveries, the employee may still be exempt if their primary duty is selling products away from their employer’s place of business.
The final thing to note about the Outside Sales Exemption is that unlike the other exemptions, there is no salary requirements. To qualify as exempt under the executive, administrative, or professional exemptions to the FLSA, an employee must generally receive a salary of $684 or more per week. That is not true for outside sales employees. There are no minimum salary requirements for such employees. Luckily, as I stated before, Del is good at his job. So that shouldn’t be an issue for him.
If you think you are not being properly paid your wages, you should talk to an experienced employment attorney, who can evaluate your case and potentially provide options. The attorneys at Wiley Walsh, P.C. have experience in FLSA and unpaid wage claims and would be happy to discuss any potential case or issue you might have regarding the FLSA or unpaid wages. In the meantime, you should definitely check out Planes, Trains, and Automobiles. It’s great!