Commissioned employees are covered under the FLSA if they meet certain requirements. However, employers fail to pay overtime on many occasions.
If a retail or service employer elects to use the overtime exemption for commissioned employees, three conditions must be met:
Unless all three conditions are met, the FLSA exemption is not applicable, and overtime pay must be paid for all hours worked over 40 in a workweek at time and one-half the regular rate of pay.
Outside and Inside Sales
Employees who generate their own sales or obtain orders may be labeled “outside sales” employees by their employers. If an “outside sales” person devotes more than 20% of the hours on work to jobs other than making sales, she may well be due overtime.
The same standard applies to “Inside Sales.” True “outside sales” employees are not due overtime pay. Whether “Inside Sales” employees are due overtime depend on the job duties performed. Unfortunately, this is a very common problem. Remember: it does not matter what your job title is. What matters are your real job duties.
Crone & Mason, plc has successfully represented employees in a national class action involving the misclassification of “inside sales” employees.
Crone & Mason, plc obtained a favorable and non-confidential settlement for all “inside sales” employees because much more than 20% of the hours were clerical and non-sales related.
By calling some employees “inside salespersons,” employers have used this scam to get free office work or unskilled labor.