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.
- Share on
Free Training & Resources
White Papers
Provided by Anaplan
Webinars
Provided by Yooz
White Papers
Provided by UJET
Further Reading
Wage bases for 2026 are rolling out. You can ensure you’re accurately withholding for state unemployment insurance (UI) tax. Here’s...
It’s easy to take your company’s payroll technology for granted, that is, until something goes wrong. As your business grows and the ex...
A Coast Guard reservist who is also a federal employee was entitled to differential pay while on active duty, the Supreme Court has ruled. ...
The IRS has finalized the tax year 2026 Form W-2, solidifying more of the reporting requirements established by federal legislation passed ...
As a finance professional, you can probably imagine the stress of an EEOC investigation and lawsuit. Two new reports from the agency show j...
Word to the wise: When OSHA comes knocking, take the visit seriously the first time around. Otherwise, the penalties can really pile up,...
