Are The Sales Employees Correctly Considered Exempt?

Are The Sales Employees Correctly Considered Exempt?

Are The Sales Employees Correctly Considered Exempt?

Many employers treat their sales employees as exempt in the Fair Labor Standards Act’s overtime and minimum wage needs. Whether or not they outlay cash an income, commissions, or some mixture of both, employers frequently think that all salespersons are exempt and never titled to overtime. With respect to the conditions, this assumption could be problematic and pricey.

For instance, a federal district court in Georgia lately approved the suggested settlement of the FLSA collective action introduced against Russell Stover Candies with a type of “sales reps.Inch The plaintiffs in Carter v. Russell Stover Candies, Corporation., No. 13-cv-1552 (N.D. Ga.) alleged they along with other sales reps were misclassified as exempt and titled to damages for delinquent overtime compensation. Following the court conditionally certified a category of sales reps, Russell Stover Candies decided to pay $3.075 million to stay the collective action. The settlement incorporated payment to 103 class people.

The FLSA and Pennsylvania Minimum Wage Act both contain overtime exemptions for genuine outdoors sales employees as well as for employees compensated commissions by retail or service establishments. Neither exemption covers every worker labeled a sales rep, however. The outdoors sales exemption applies only when the employee’s primary duty is “making sales” and also the worker is “customarily and frequently engaged from the employer’s office.Inch This exemption doesn’t affect “inside” salespersons, and purchasers made via telephone, mail, and also the Internet don’t become qualified as outdoors sales. Additionally, the commissioned worker exemption applies simply to employees of “retail or service establishments” who’re compensated in a fashion that meets the exemption’s needs. Simply having to pay an worker on the commission basis doesn’t instantly result in the worker exempt in the overtime needs.

Misclassification of salespersons is a fertile ground for class-based litigation and Department of labor investigations within the last couple of years. To prevent this kind of unpredicted and uncomfortable experience, employers who treat sales employees as exempt should make sure these employees be eligible for a among the exemptions or think about making changes for their compensation practices.



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Comment ( 1 )
  1. onthegreenz
    November 8, 2016 at 3:32 am

    Look at how quick the LIBS turned agai1t him… congrats, you voted him in there.

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