To be properly qualified as exempt an outside sales employee must pass the duties test. Unlike other white collar exemptions under the FLSA, outside sales employees are not subject to the minimum salary requirements, nor the salary basis test. As long as they pass the duties test they may be properly classified as exempt.
Outside Sales Employee Duties Test
- Employee's primary duty must be making sales or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
- The employee is customarily and regularly engaged away from the employer’s place or places of business
“Customarily and regularly” means the activity is more than occasional but doesn’t necessarily need to be constant. It includes work that’s normally done on a weekly basis, but doesn’t include one-time or infrequent tasks. A number of states have a specific percentage that they apply to this element of the test. For instance, employees in Oregon must spend at least 70% of their time engaged in those activities, whereas California employees must spend 50%.
“Away from employer’s place of business” means the employee is at the customer's office or job site, or selling door-to-door. This doesn’t include sales by mail, phone or internet. Most importantly, any fixed location used by an outside sale employee as a headquarters – like their own home office, or a satellite office – will be considered the employer’s place of business. So, if they don’t “customarily and regularly” make it out of their home office, they won’t qualify for this exemption.