Human Resource Blog

Outside Sales Exemptions in South Dakota

	Compensation
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Are all of our sales people exempt in South Dakota or just the outside sales people?

Not all sales people are exempt from coverage under the Fair Labor Standards Act. In fact, only outside sales people may qualify for exempt status. In order for outside sales people to qualify for exempt status, they also need to meet specific criteria for coverage.

The Fair Labor Standards Act is a federal Act that is in place for employers and employees in states across the country, including the state of South Dakota. When an employee is covered by the Act, the employee needs to be paid at least minimum wage for every hour that the employee works. The FLSA actually establishes minimum wage.

The Act also establishes that employees need to be paid overtime for work that they perform in addition to the standard 40-hour work week. Overtime should be paid at a rate of time-and-a-half of the normal rate of pay for employees.

In order for an outside sales person to be exempt from coverage under the Act, the individual needs to meet at least the following requirements:

·         He or she needs to work in an outside sales position by working outside of the employer’s office. However, the employee may not be eligible if he or she simply works from home, as a home office is still considered to be property of the business.

·         The individual also needs to work primarily in a sales capacity by making sales calls, visiting with clients or potential clients, obtaining contracts, and maintaining customer relations.

·         Employees also can be exempt if they work at a promotional event for part of their time. However, internal sales people will not necessarily qualify for exempt status even if they work at a promotional event.

When an employee is exempt from coverage, his or her compensation may be based on a salary or on commissions instead of the minimum wage. CB