Outside Salesperson

An outside salesperson is someone who spends half or more of their workweek outside the employer's primary business location, usually advertising and negotiating for transactions of a particular product or service with clients and potential customers. An employer is not required to give overtime compensation to an outside salesperson, but the employer must establish that the employee is in fact an outside salesperson for this rule to apply.

An example of an outside salesperson would be the proverbial door-to-door salesperson, selling household products such as vacuum cleaners or refrigerators to people at their front doorstep. However, simply being the deliverer of a product, or having a specific job title, is never enough in the eyes of the law. The employee must fit within the spirit of what a salesperson is supposed to be.

For instance, agents driving and delivering bottled water to customers were NOT outside salespeople unless they spent the majority of their time actually selling the product, as opposed to merely delivering it to customers. Ramirez v. Yosemite Water Co., (1999) 20 C4th 785, 85 CR2d 844.

Commissioned Salesperson

As well, a commissioned salesperson is exempt from overtime if she earns over half of her income from commissions and her income is one and half times the minimum wage rate of California.

However, it is very important to note that whether the employee's income attributed to commissions genuinely qualifies as commission pay often will make or break this classification. An employer cannot give an employee a bonus, for instance, and call it a commission just for the purposes of escaping the overtime compensation laws.

In addition, commissioned salespersons must actually be principally involved with selling their products/services in order to be exempt. Keyes Motors, Inc. v. Division of Labor Standards Enforcement, (1987) 197 CA3d 557, 242 CR 873 (auto mechanics who were paid on commission from charged customers were not exempt, as they only rendered repair services and were not involved in selling their services to customers).

A good example of a commissioned salesperson would probably be the typical car salesman. Every sale, he earns a commission or kind of percentage bonus for sales of cars he manages to move off of his dealership. Because, however, he earns a considerable amount of commission from selling the cars, the salesman may be exempt from overtime compensation laws, depending on whether he makes over half of his income from the commissions.

The classification of a worker is not determined by title but instead is determined by both salary and duties. Thus, it is irrelevant if a nonexempt employee agrees to work overtime without additional compensation; additional compensation would be required by California law.

Contact Us

If you and other employees have not been granted proper overtime wages, or if you have been denied rest periods or meal breaks or have been compelled to work during them, contact the leading lawyers in California for overtime compensation and rest or meal breaks at Kokozian Law Firm, APC. 323-857-5900. Ask about our free initial consultation.