Minimum Wage and Overtime Requirements for Inside and Outside Salespeople Under the Massachusetts Wage Act
Determining if your payment plan complies with Massachusetts laws for payment of inside and outside salespeople in Pittsfield, Worcester, Springfield, Fall River, Lowell, New Bedford, and the Cape.
Below is a summary of how wage-and-hour laws are applied to salespersons for minimum wage and overtime purposes. However, these are general descriptions and won’t be perfectly applicable to all situations. As a result, read these carefully, but keep in mind, if you live or work in Massachusetts, the best way to determine if you are or are not being paid properly is to consult with a Massachusetts employment attorney.
What is an outside sales representative? Are outside sales employees exempt from massachusetts minimum wage and overtime laws?
Generally speaking, there are two types of outside sales employees, ones who are exempt from overtime requirements and ones who are exempt from overtime and minimum wage requirements. The first exempts outside sales employees from minimum wage and overtime requirements and applies to employees who (1) regularly sell products away from the place of business and (2) refrain from making daily reports or visits to the office. The second exempts outside sales employees from just overtime requirements and applies to employees who (1) are employed to make sales or obtain orders for sales and (2) are customarily and regularly engaged away from the employer’s place of business.
examples of the different types of outside sales employees under massachusetts law.
Employee A works for a solar company as a salesperson. Employee A starts each day with a morning huddle at his employer’s office during which he, his supervisors, and his fellow salespeople discuss leads and sales techniques, fill out paperwork, and prepare reports. Employee A spends the remaining 90% of his workday in the field, knocking on doors, trying to sell. In this situation, Employee A is entitled to minimum wage because he is regularly engaged in sales, but he makes daily trips to the office.
On the other hand, say Employee A begins his day at home, receives a list of sales leads via email, and heads straight from home to those houses to sell. That salesperson, because he does not make daily trips to an office and regularly sells products away from the workplace, is not entitled to minimum wage or overtime protections.
What is an inside sales representative? Are inside sales employees entitled to minimum wage and overtime pay under Massachusetts law?
Massachusetts law does not contain an exemption from minimum wage or overtime for inside sales employees. As a result, under Massachusetts law, inside sales representatives must be paid at least minimum wage and overtime. Federal law does contain an exemption that typically applies to many inside sales employees and exempts them from overtime requirements. To qualify for this exemption, a business must be considered a retail or service establishment and (1) the employee’s regular rate of pay must be equal to at least 1.5x federal minimum wage and (2) more than half of the employee’s compensation must be derived from commissions.
Are you a resident of Pittsfield, Springfield, Worcester, Lowell, Fall River, New Bedford or the Cape? Are you wondering if your payment plan complies with Massachusetts law regarding the payment of minimum wage or overtime? Click below to speak with an employment attorney today.
