What is an Outside Salesperson? Legal Definition and Key Insights

Q: Are outside salespersons entitled to overtime pay?

Generally, they are exempt from overtime pay, but specific conditions must be met.

Q: Can an outside salesperson perform other tasks?

Yes, but their primary responsibility must be sales-related to maintain their exempt status.

Definition & Meaning

An outside salesperson is an employee whose primary role is to sell products or services while working away from the company's physical location, such as an office or showroom. These employees are typically exempt from overtime pay under federal law, as their main duties focus on sales activities rather than other tasks like deliveries or servicing. While they may engage in some deliveries, the majority of their work time is spent traveling to meet clients or prospects.

Table of content

Legal Use & context

The term "outside salesperson" is primarily used in employment law, particularly in discussions about wage and hour regulations. This designation is important for understanding exemptions from overtime pay under the Fair Labor Standards Act (FLSA). Outside salespersons may also be relevant in contract law when discussing sales agreements or employment contracts. Users can find helpful legal templates related to employment agreements and sales contracts on platforms like US Legal Forms.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Example 1: A salesperson for a software company travels to meet clients at their offices to demonstrate products and close sales. Most of their time is spent on these sales activities rather than performing administrative tasks.

Example 2: A representative for a wholesale distributor visits retail stores to sell inventory directly, spending minimal time on deliveries to those stores. (hypothetical example)

Relevant laws & statutes

The Fair Labor Standards Act (FLSA) is the primary federal law governing the classification of outside salespersons and their exemption from overtime pay. Other state-specific labor laws may also apply, depending on the jurisdiction.

State-by-state differences

State	Overtime Regulations
California	Strict regulations; additional requirements for salespersons.
Texas	Follows federal guidelines; fewer state-specific regulations.
New York	Similar to federal law but may have additional protections.

This is not a complete list. State laws vary, and users should consult local rules for specific guidance.

Comparison with related terms

Term	Definition	Key Differences
Inside Salesperson	An employee who sells products from within the company's office.	Works primarily in-office, typically not exempt from overtime.
Commission-Based Salesperson	An employee compensated primarily through commissions on sales.	May work inside or outside; compensation structure differs.

Common misunderstandings

What to do if this term applies to you

If you are classified as an outside salesperson, ensure you understand your rights regarding overtime pay and job responsibilities. If you have questions about your classification or believe you are misclassified, consider consulting a legal professional. Additionally, you can explore US Legal Forms for templates related to employment agreements and sales contracts that may help clarify your role and responsibilities.

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Quick facts

Typical roles: Sales representatives, account managers.
Jurisdiction: Federal law, with state variations.
Overtime exemption: Yes, under specific conditions.
Common industries: Retail, technology, pharmaceuticals.

Key takeaways

Frequently asked questions

What qualifies someone as an outside salesperson?

To qualify, the person must primarily engage in sales activities away from the employer's place of business.