Are your sales staffers eligible for overtime?
It’s a lesson an increasing number of employers are learning the hard way: Sales reps are not automatically exempt from receiving overtime payments.
In the most recent example, a federal judge ruled that under the Fair Labor Standards Act (FLSA) pharmaceutical reps for Schering Plough were entitled to overtime for any hours they worked over 40 in a single work week.
Originally, Schering Plough tried to argue that its reps weren’t owed overtime because the “outside sales exemption” applied.
But a federal court ruled against the firm.
So, the company then tried to argue its reps fit the “administrative exemption.”
Again, Schering was unable to prove that its reps weren’t eligible for overtime under this exemption, either.
Recently, a number of courts have ruled against employers who try to classify their sales reps as overtime exempt by using the administrative exemption.
So if your company has any reps who aren’t eligible for OT because of the administrative exemption, you’ll want to talk to HR and legal to make sure they pass all of the tests for that exemption.
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