Overtime Pay For Sales People On Salary
Did you know that most inside sales employees should be getting paid overtime for any hours they work over 40 hours in a workweek, even if they are getting paid a salary? There is a rampant misconception among employers that by simply paying an inside sales person a salary means that the employee is not owed overtime. This is false. The Fair Labor Standards Act states that all employees who work over 40 hours a week are owed overtime unless they meet certain specific exemption requirements, with some exceptions. Those exemptions are generally based on the following criteria:
1. A portion of the individual’s wages must be a fixed salary that does not deviate for any reason.
2. The employee must perform certain job duties that are either:
- a) Primarily related to the management or general business operations of the employer which include the exercise of discretion and independent judgment; or,
- b) Primarily managing the company including regularly supervising at least two or more full time employees and have the ability to hire and fire employees.
If you are an inside sales employee and you are not getting paid overtime, you may be owed overtime wages for any hours you work over 40 hours in a workweek. Just to give you an example of what that means, let’s say you work on average 50 hours a week and you earn approximately $60,000 a year. This means that you work 10 hours of overtime, or 520 hours of overtime a year. After calculating your hourly rate and multiplying that by 1.5, your overtime rate would be approximately $34.61. This means that over the course of a year you would be owed an additional nearly $18,000.00 in overtime pay. Not to mention, the Fair Labor Standards Act states that this amount should be doubled in many circumstances.
One thing that confuses many employees and employers is what actually counts as time worked. The Arizona Employment Law states that any time you are suffered or permitted to work, is time worked. In other words, it is anytime that you are doing any work for your employer whether at the office or not. This would include answering calls and responding to work emails at home.
There are many examples of inside sales employees who have moved forward with claims against their previous employer and prevailed. This issue is especially prevalent within the software sales industry. One such lawsuit that is public record is Geoff Chambers. v. ZocDoc Inc. which revolved around an inside sales person who filed a lawsuit against ZocDoc, Inc., a company that sells appointment scheduling software to medical offices. In the end, 189 ZocDoc inside sales employees who had not been paid overtime joined the lawsuit and settled the case with ZocDoc for over $1.7 million dollars.
If you have questions about whether you are owed overtime as an inside sales employee, please contact Denton Peterson law firm at (480) 325-9900 or [email protected]. We look forward to helping you with your claims.