Typically some of the first roles hired by an employer, particularly in the tech sector or as a company expands in the United States, are salespeople. According to the U.S. Bureau of Labor and Statistics, there are over 13 million people employed in sales and related occupations in the United States. Given the importance and prevalence of these positions, it is important for employers to be aware of specific considerations when it comes to employing salespeople to avoid headaches down the line. While below is not an exhaustive guide on the topic, it addresses many significant legal considerations and common pitfalls associated with hiring salespeople.
CLASSIFICATION ISSUES
As an initial matter, employees must be classified as exempt or nonexempt from the minimum wage and overtime requirements of the federal Fair Labor Standards Act and applicable state law. For salespeople, it does not automatically follow that they are exempt. The most likely overtime exemptions for non-managerial salespeople are the “outside sales” or “inside sales” exemptions. Under federal law, to qualify for the “outside sales” exemption, generally the employee’s primary duty must be making sales and the employee must be customarily and regularly engaged away from the employer’s place of business. With respect to the latter, any fixed site, whether home or office, used by a salesperson for telephonic sales solicitation is considered one of the employer’s places of business, meaning if a person is doing the selling remotely from home, this element is not fulfilled.
Click here to view the full article