Posted by robert ottinger on Thu, Jul 08, 2010 @ 08:19 AM
The outcome of an overtime class action involving 2500 employees hinged on the meaning of a word: salesperson. The question before the court was simple - does an employee have to sell something in order to be deemed a salesperson?
The case involved 2500 Novartis employees who sought overtime pay. Novartis argued that the 2500 employees were not entitled to overtime pay because they were outside salespeople. Under the Fairl Labor Standards Act, outside salespeople are not entitled to overtime pay.
The court took a pratical approach and said that an employee cannot be considered an exempt outside salesperson unless they actually sell something. Makes a lot of sense. The 2500 employee were called "sales representatives" but a person's title means little in these cases. After taking a look at what these employees did, the court found that the employees did not sell anything.
The employees only visited doctors offices and entertained them in order to promote Novartis drugs with the hope that the doctors might prescribe Novartis drugs to their patients. Since there were laws that strictly prohibited the Novartis employeses from actually selling the drug, the court concluded that the Novartis employees were not salespeople. Also the drugs were sold at drug stores and the employees had nothing to do with these sales. An employee cannot be deemed an outside salesperson unless they actually sell something.
Posted by robert ottinger on Wed, Feb 24, 2010 @ 12:23 AM
California, unlike most other states, has a law that requires employers to reimburse its employees for reasonable business expenses. california Labor Code Section 2802 (a) requires an employer to "indemnify ... employees for all necessary expenditures and losses incurred ... in direct consequence of the discharge of his or her duties ..." Employers have flexibility in their ability to set off these expenses through any means that works - but no matter how it is done, the company has to reimburse its employees for all reasonable business expenses incurred.
Our firm is currently handling a case against a company that simply does not reimburse its sales team for reasonable costs incurred as part of their sales duties such as to tolls, parking, business meals and the like. It is a fairly common practice and in most states companies do not have to reimburse its employees unless the expenses incurred cause the employees wages to fall below minimum wage.
Posted by robert ottinger on Sat, Feb 20, 2010 @ 10:32 PM
We get a lot of calls from sales people who put in long hours traveling and visiting potential customers. These road weary salespeople want to know if they are entitled to overtime pay. The answer is usually no. Outside sales people are not entitled to overtime pay. The reason for this rule is that employers cannot control what outside sales people do as they are outside of the office.
An outside sales person is one who regularly and customarily performs genuine sales work at customer locations. There is no exact formula under federal law to determine how much time must be spent at customer sites - it is enough if it happens regularly and customarily. Some states, like California, have slightly different rules which require that 50% or more of the time be spent outside.
This overtime pay exclusion does not apply to inside sales people who typically do sales work from one location such as the office or their home. People who customarily do not visit customer locations are inside sales people and they are entitled to overtime pay.
The outside sales overtime pay exclusion does not apply to people who travel to do promotional work or marketing. It only applies to people who actually sell goods or services.