California Rights for Outside Sales Employees

When it comes to workers’ rights, California law is often stronger than federal law, meaning that California often grants more generous rights to workers than the federal overtime and minimum wage law known as the Fair Labor Standards Act (“FLSA”). One example of is found in how the Outside Salesperson exemption is treated under California law and the FLSA.

Under the FLSA, an outside sales employee is exempt if they meet the following test:

The 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 must be customarily and regularly engaged away from the employer’s place or places of business
    • California’s requirements for outside salespersons are somewhat different. Under the California Labor Code and  California Wage Orders, an outside salesperson is defined as follows:
      • Any person, 18 years of age or over;
      • Who customarily and regularly works more than half (more than 50 percent) the working time away from the employer’s place of business;
      • Selling tangible or intangible items or obtaining orders or contracts for products, services, or use of facilities.

Unlike the FLSA’s qualitative standard, California law sets a quantitative standard. The FLSA focuses more on the overall quality of a salesperson’s work. Unlike the FLSA which focuses on an employee’s “primary duty,” California law takes “a quantitative approach, looking to the actual hours spent on sales activity to determine if an employee is primarily a salesperson.” Under this standard, an employee is exempt if more than fifty percent of his job duties involved “sales-related activities.”

If you are employed as an Outside Salesperson (or are involved in sales as an independent contractor) in California and are spending less than 50% of your time outside of the office (including a home office), then you may be entitled to overtime for the hours you work over 40 in a work week.

If you have questions regarding overtime or your employment, please contact Shavitz Law Group at [email protected].

 

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