Attorneys James T. Carey and P. Zachary Stewart

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Understanding the FLSA Outside Sales Exemption: A Guide to Compliance and Common Violations

by | Jun 14, 2024 | Overtime And Wage Issues

The Fair Labor Standards Act (FLSA) provides several exemptions to its wage and hour regulations, one of the most frequently misunderstood being the outside sales exemption. This exemption applies to employees who engage in sales activities outside their employer’s place of business. However, employers sometimes misclassify employees, leading to potential FLSA violations. This blog post will explain the FLSA outside sales exemption, its criteria, and highlight common violations through illustrative examples, including one specific to plumbers selling plumbing services.

Understanding the FLSA Outside Sales Exemption

The FLSA outside sales exemption is designed for employees whose primary duty involves making sales or obtaining contracts for services or the use of facilities, and who customarily and regularly work away from the employer’s place of business. Employees meeting these criteria are exempt from the FLSA’s minimum wage and overtime pay requirements.

Criteria for the Outside Sales Exemption

  1. Primary Duty: The employee’s main duty must be making sales or obtaining orders or contracts for services or facilities use; AND
  2. Customarily and Regularly Away from the Employer’s Place of Business: The employee must consistently engage in sales activities outside of the employer’s primary location.

Employees who do not satisfy both criteria do not qualify for the exemption and must be compensated according to the FLSA’s minimum wage and overtime provisions.

Examples of Violations of the FLSA Outside Sales Exemption

1. Misclassification of Inside Sales Employees: An employee who conducts the majority of their sales activities within the employer’s office or storefront does not qualify for the outside sales exemption.

Example: Anna works for a home improvement company, making sales calls and handling customer inquiries from her office. Occasionally, she visits potential clients’ homes, but most of her work is done at the company’s office. Her employer classifies her as an outside sales employee and denies her overtime pay. This misclassification violates the FLSA since Anna’s primary duty is performed inside the office.

2. Non-Sales Primary Duties: Employees whose main duties do not involve direct sales or obtaining orders, even if they occasionally perform sales tasks outside the office, do not meet the exemption criteria.

Example: James works for a medical supply company and is classified as an outside sales representative. However, his primary responsibilities include managing stock, completing administrative tasks, and providing customer support from his home office. Although he occasionally visits clients, his main duties are not sales-related. This misclassification is a violation of the FLSA, as James does not primarily engage in outside sales.

3. Plumbers Selling Plumbing Services: A common area of misclassification involves employees in trades, such as plumbers, who also engage in sales activities.

Example: Mike is a plumber employed by a plumbing company. In addition to his plumbing duties, he is tasked with selling maintenance contracts and plumbing services to customers during site visits. His employer classifies him as an outside sales employee and does not pay him overtime. However, since Mike’s primary duty is performing plumbing work and not making sales, he does not qualify for the outside sales exemption. This misclassification is a violation of the FLSA, as his primary role is not selling but providing plumbing services.

Consequences of Misclassification

Misclassifying employees as outside sales representatives can lead to significant consequences, including liability for unpaid wages, overtime, liquidated damages, and legal fees. It also undermines employees’ rights to fair compensation for their work.


The FLSA outside sales exemption is specific and requires careful adherence to its criteria. Employers must accurately classify employees to avoid legal repercussions and ensure fair treatment. Employees should be aware of their rights and understand the exemption criteria to protect themselves from misclassification. If you suspect a violation, seeking legal counsel is crucial to address potential misclassification and secure rightful compensation.

Call Us Now For Help

If you believe you have been misclassified under the FLSA outside sales exemption, call Carey & Stewart, PLLC now at 304-914-3577 to schedule a free and confidential consultation.  You can also contact us online.