Outside Sales

If you are an outside salesperson and are not paid overtime by your employer, contact the Illinois outside sales attorneys at the Chicago Overtime Law Center. We will investigate your potential claim and advise you of your options.

The federal Fair Labor Standards Act (FLSA) requires employers to pay minimum wage and overtime benefits to their employees. For salespeople, commissions and non-discretionary bonuses must be included in determining wages for purposes of minimum wage and overtime. However, several categories of employees are exempt from FLSA’s protections and are not entitled to minimum wage or overtime under federal law. These are generally considered “white collar” exceptions, one of which is known as the outside salesperson exception. If an employee qualifies as an outside salesperson, the employee is not protected by FLSA.

Whether an employee is an outside salesperson requires a complex, fact-intensive assessment. The title or designation of the employee within the company is of limited importance. Instead, a court will analyze the duties and responsibilities of the employee to determine whether the employee fits within the outside sales exemption.

To be an outside salesperson, the employee must have as his or her primary duty the making of sales or obtaining orders, and must spend most of his or her time away from the employer’s place of business. An outside salesperson who simply returns to the employer’s office to fill out sales-related paperwork, without more, will probably qualify as exempt. However, the salesperson must generally make sales at the customer’s home or place of business. Closing sales over the phone or Internet is not exempt activity.

Typically, whether an employee spends most of his or her time away from the office is not hotly disputed. More commonly questions pertain to whether the employee actually has a primary duty of making sales or obtaining orders, as defined by FLSA. Many people are involved in sales and marketing but are not responsible themselves for closing sales. Sometimes, licensing or other legal requirements prevent an employee from actually making direct sales to a customer. In other instances, an employee may perform truly promotional work, which is meant to stimulate interest in the employer’s products and lay the groundwork for another individual to make the sale. Obtaining a commitment to buy, even if another closes the sale, may constitute sales activity under FLSA. However, every case must be analyzed based on its own facts.

Outside sales exemption cases can be pursued individually, as they often involve significant back pay. In many instances, however, misclassification as an exempt employee can be pursued by a class of employees at once. Employers typically define a class of employees as exempt or non-exempt, based upon certain common criteria. Where many employees are misclassified at once based upon the same erroneous decision, the affected employees can often pursue their claims jointly through a collective action. This can give the employees additional leverage when dealing with their employers.

Whether you qualify as exempt under the outside sales exception can be difficult to determine. In addition to FLSA, Illinois law provides exemptions for certain other types of salespeople. The analysis and advice of skilled Illinois outside sales attorneys should be sought, as a significant amount of money can be involved for you and your family. The attorneys at the Chicago Overtime Law Center have successfully pursued many cases based upon erroneous classification of employees as exempt, including both individual claims and collective actions. If you believe you have been misclassified as an outside salesperson, contact our offices today at (312) 869-4095.