An “outside salesperson” is an employee who “customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities.” In other words, for this exemption from overtime to apply, a salesperson must spend more than half of her working hours (1) engaged in exempt sales activity (selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities) while (2) outside (away from the employer’s place of business).
Whether something is a “sales activity” isn’t always a straightforward question. Tasks that are “incidental to sales” do not count towards the one-half threshold. Thus, for example, delivering a product already sold is “incidental” and doesn’t count. Thus, depending on the nature of the job, whether something is direct selling activity as opposed to incidental to sales requires in-depth legal analysis.
Whether an employee is working “outside” is a less complicated question generally. An employee who works at the employer’s office, whether permanent or temporary, is not working “away from the employer’s place of business.” Further, an employee who works from a home office is often also not working “outside” if that employee spends most of their time at the home office.
Generally, the outside sales exemption is intended to apply to salespeople who spend more than half of their time visiting the customer’s place of business or selling door-to-door. See, e.g., 29 C.F.R. § 541.502 [“Outside sales does not include sales made by mail, telephone or the Internet unless such contact is used merely as an adjunct to personal calls. Thus, any fixed site, whether home or office, used by a salesperson as a headquarters or for telephonic solicitation of sales is considered one of the employer’s places of business, even though the employer is not in any formal sense the owner or tenant of the property.”].
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