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Rethink exemption status of traveling sales rep

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in Compensation and Benefits,Human Resources

Q. We employ sales and service reps who travel and service stores around the country. They work from their home offices, use their own cars and communicate with us via phone. We classify them as exempt. Is this correct? (Most reps are required to spend at least eight hours at each location. Some drive three hours or longer to get to each store. We encourage overnight stays under these circumstances.) —L.C., Oklahoma

A. Your reps may qualify for the outside sales employee exemption, but we do have some concerns. More facts are needed to make a definitive ruling. To qualify for this exemption—which is basically unchanged under the revised Labor Department regulations—an employee's primary duty must involve making sales or obtaining orders, and the employee must regularly work away from the employer's place of business.

But because your reps are required to spend at least eight hours “servicing” a single store, this leads us to believe that making sales isn't their primary job duty. Also, the time spent at an employee's home office is typically not considered time “away from the employer's place of business” for purposes of this exemption. So you'd need to determine how much time the reps spend on the road versus how much time is spent in their home offices.

Finally, you also want to consider whether your reps could be classified as independent contractors. Reps who rarely perform work at an employer-owned facility often qualify as independent contractors. This decision requires a case-by-case analysis of the relevant facts, particularly the degree of supervision and control you have over the reps' work.

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