• Are 18 years of age or older
• Customarily and regularly work more than 50 percent of their working time away from your place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities

• Outside salespeople do not need to meet the minimum salary requirement that covers the executive, administrative and professional exemptions.

Unlike federal law, California law does not allow work performed incidental to and in conjunction with the employee’s own outside sales or solicitations, including incidental deliveries and collections, to be considered exempt work. This distinction is particularly important for route salespeople and others who perform many functions other than sales during an average day, such as delivery, repair and maintenance.

The California Supreme Court’s decision in the case of Ramirez v. Yosemite Water 1 clarified that to be exempt, outside salespeople in California must spend at least 50 percent of their time performing exempt duties, which do not include work such as delivery, repair and maintenance. Work performed incidental to and in conjunction with the employee’s outside sales is not considered exempt work in California and cannot exceed 50 percent of an employee’s working time.

For Wage Order 16, On-site Occupations in Construction, Drilling, Logging and Mining Industries, the “outside salesperson” definition has been specifically narrowed to not include an employee who makes deliveries or service calls for the purpose of installing, replacing, repairing, removing, or servicing a product.

• Exempt Analysis Worksheet - Salesperson Exemption

The California Division of Labor Standards Enforcement has stated that for the purposes of the outside salesperson exemption, a “place of business” is a location owned or controlled by the employer. However, a recent court case found that if the employer still exerts a high degree of control over the employee’s working conditions — even if they don’t own or lease the space - the worker may actually be nonexempt and not qualify for the outside salesperson exemption.2

• The salary deduction rules that apply to the executive, administrative and professional exemptions do not apply to an outside salesperson who is paid in whole or in part on salary.

1. Ramirez v. Yosemite Water, 20 Cal. 4th 785 (1999)