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What counts as an ‘outside’ salesperson who’s exempt from FLSA?

07/13/2012

Q. My question is twofold. We have a newly hired salesman who spends most of the time in the office. He does most of his sales over the phone or email. He is able to take his company-provided laptop home. He is employed as a salaried employee. We have not set up a commission schedule as of yet; he needs to prove he can sell first.  I have been reviewing the wage payment requirements for Outside Salespersons and Commissioned Salespersons. Under the rules for Outside Salesperson he must: (1) Primarily make outside sales; (2) Work regularly away from the office; and (3) Obtain contracts for services.  Under the rules for commissioned salesman under section 7i of the Fair Labor Standards Act, he must: (1) Be an employee; (2) Be paid a regular rate in excess of 1.5 times the minimum wage for every hour worked; and (3) More than half of his earnings in a period must be commissions on services. I'm trying to find out how this applies to our specific situation, now and in the future.  Can you please let me know if we are paying him correctly now as a salesman, and if he goes to commission only, should he still be paid if he gets no commission in a biweekly pay period? – Lisa, California

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