EXEMPTION FOR OUTSIDE SALESPERSONS
Outside Salespeople are exempt from many California wage and hour laws.
This exemption applies to:
All outside salespersons under any IWC Wage Order
Type of employee:
What are they exempt from:
Minimum Wage; Overtime; Meal Breaks; Rest Breaks
What is an outside sales professional:
California law requires that in order for an outside salesperson to be exempt from minimum wage, overtime, meal breaks, and rest breaks, the employer must prove all of the following elements:
[ELEMENT NUMBER 1]: The employee must be over 18 years old.
[ELEMENT NUMBER 2]: The employee’s primary duty must either making sales or obtaining orders/contracts for which a client or customer will pay.
- Time spent on tasks that are merely “incidental to sales” does not count towards the making of sales.
[ELEMENT NUMBER 3]: The employee must spend more than 50% of his or her time away from the employer’s place of business and at the customer’s place of business or home, selling tangible or intangible items.
- The fifty percent (50%) time requirement does not include sales made over the telephone or over the internet.
[ELEMENT NUMBER 4]: The employee must receive commission-based compensation.
- Commissions arise from the sale of a product or service but not the making of a product. In order to be a commission, the compensation must be a percentage of the price of the product or service sold. If the employee receives a set amount for each item sold or service rendered, such wages are likely not commissions.
WHAT IS THE LABOR COMMISSIONER’S OPINION
DLSE Opinion. Letter No.
Exemption: Outside salesperson, real estate
Exemption: Outside salesperson