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The Industrial Welfare Commission (IWC) Orders define an outside salesperson as an individual engaged in sales away from the employer's place of business more than half of his/her working hours.
Outside salespersons are exempt from overtime requirements if:
If the activities of the individual during 50+ percent of his/her work time involve anything other than sales, the exemption will not apply. Work performed incidental to the sale such as delivery, repair and maintenance is not considered exempt work in California and cannot exceed 50 percent of an employee's working time.
Outside sales does not include sales made by mail, telephone or the Internet, unless such contact is used as an adjunct to personal calls. The time must be spent selling or in sales preparation.
"Sales" includes any sale, exchange, contract to sell, consignment of sales, shipment for sale or other disposition. It includes the transfer of title to tangible property. Sales promotion is considered sales activity.
Stocking of a vehicle with samples or advertising materials is considered a part of the sales promotion work so long as the samples or materials are not sold.
Most inside sales employees are nonexempt. An inside salesperson is one who sells merchandise in a store or sales lot (e.g., car or RV sales lot) or one who sells a product or service via a company telephone. Inside sales employees working under Wage Orders 4 and 7 are exempt from overtime if their earnings paid in each pay period exceed 1 ½ times the minimum wage and more than half the employee's compensation represents commissions. This exemption applies to overtime only, not all other wage and hour laws.
You can find more information on the
Outside Salesperson Exemption and
Commissioned Inside Sales Employee Exemption in the HR Library.