Overview: The Fair Labor Standards Act (FLSA) has two main exemptions that are available for sales personnel:
The former is an exemption from both the minimum wage and overtime requirements of the FLSA; the latter is an exemption only from the overtime requirements.
Trends: The most significant development in this area in many years came in 2012 when the US Supreme Court ruled that outside salespersons do not necessarily need to transfer a title or directly consummate a transaction to be exempt from the minimum wage and overtime requirements of the FLSA. This made clear that pharmaceutical sales representatives and other similar employees who make "arrangements that are tantamount, in a particular industry, to a paradigmatic sale of a commodity" can qualify for the exemption.
Author: Michael Cardman, Legal Editor
Updated to include a forthcoming amendment regarding a minimum wage and overtime exemption.
Paying an employee a lot of money does not necessarily guarantee that he will be exempt from overtime requirements, as the 11th Circuit Court of Appeals' ruling in Freixa v. Prestige Cruise Servs. illustrates.
Updated to reflect technical amendments to the minimum wage and overtime exemption for certain employees of seasonal and recreational establishments, effective March 21, 2017.
Updated to reflect the new salary basis rates for computer professionals, effective January 1, 2017.
Updated to reflect changes to the minimum salary for exempt executive and administrative employees, effective December 31, 2016.
Updated to reflect forthcoming FLSA overtime exemption requirements.
In-depth review of the spectrum of Maryland employment law requirements HR must follow with respect to Employee Classification.
In-depth review of the spectrum of West Virginia employment law requirements HR must follow with respect to employee classification.
In-depth review of the spectrum of Montana employment law requirements HR must follow with respect to employee classification.
HR and legal considerations for employers regarding the FLSA sales personnel exemption.