Sec. 541.500 General rule for outside sales employees.
 
 (a) The term ``employee employed in the capacity of outside 
salesman'' in section 13(a)(1) of the Act shall mean any employee:
 (1) Whose primary duty is:
 (i) making sales within the meaning of section 3(k) of the Act, or
 (ii) obtaining orders or contracts for services or for the use of 
facilities for
 
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which a consideration will be paid by the client or customer; and
 (2) Who is customarily and regularly engaged away from the 
employer's place or places of business in performing such primary duty.
 (b) The term ``primary duty'' is defined at Sec. 541.700. In 
determining the primary duty of an outside sales employee, work 
performed incidental to and in conjunction with the employee's own 
outside sales or solicitations, including incidental deliveries and 
collections, shall be regarded as exempt outside sales work. Other work 
that furthers the employee's sales efforts also shall be regarded as 
exempt work including, for example, writing sales reports, updating or 
revising the employee's sales or display catalogue, planning 
itineraries and attending sales conferences.
 (c) The requirements of subpart G (salary requirements) of this 
part do not apply to the outside sales employees described in this 
section.
 
 
 
Sec. 541.501 Making sales or obtaining orders.
 
 (a) Section 541.500 requires that the employee be engaged in:
 (1) Making sales within the meaning of section 3(k) of the Act, or
 (2) Obtaining orders or contracts for services or for the use of 
facilities.
 (b) Sales within the meaning of section 3(k) of the Act include the 
transfer of title to tangible property, and in certain cases, of 
tangible and valuable evidences of intangible property. Section 3(k) of 
the Act states that ``sale'' or ``sell'' includes any sale, exchange, 
contract to sell, consignment for sale, shipment for sale, or other 
disposition.
 (c) Exempt outside sales work includes not only the sales of 
commodities, but also ``obtaining orders or contracts for services or 
for the use of facilities for which a consideration will be paid by the 
client or customer.'' Obtaining orders for ``the use of facilities'' 
includes the selling of time on radio or television, the solicitation 
of advertising for newspapers and other periodicals, and the 
solicitation of freight for railroads and other transportation 
agencies.
 (d) The word ``services'' extends the outside sales exemption to 
employees who sell or take orders for a service, which may be performed 
for the customer by someone other than the person taking the order.
 
 
 
Sec. 541.502 Away from employer's place of business.
 
 An outside sales employee must be customarily and regularly engaged 
``away from the employer's place or places of business.'' The outside 
sales employee is an employee who makes sales at the customer's place 
of business or, if selling door-to-door, at the customer's home. 
Outside sales does not include sales made by mail, telephone or the 
Internet unless such contact is used merely as an adjunct to personal 
calls. Thus, any fixed site, whether home or office, used by a 
salesperson as a headquarters or for telephonic solicitation of sales 
is considered one of the employer's places of business, even though the 
employer is not in any formal sense the owner or tenant of the 
property. However, an outside sales employee does not lose the 
exemption by displaying samples in hotel sample rooms during trips from 
city to city; these sample rooms should not be considered as the 
employer's places of business. Similarly, an outside sales employee 
does not lose the exemption by displaying the employer's products at a 
trade show. If selling actually occurs, rather than just sales 
promotion, trade shows of short duration (i.e., one or two weeks) 
should not be considered as the employer's place of business.
 
 
 
Sec. 541.503 Promotion work.
 
 (a) Promotion work is one type of activity often performed by 
persons who make sales, which may or may not be exempt outside sales 
work, depending upon the circumstances under which it is performed. 
Promotional work that is actually performed incidental to and in 
conjunction with an employee's own outside sales or solicitations is 
exempt work. On the other hand, promotional work that is incidental to 
sales made, or to be made, by someone else is not exempt outside sales 
work. An employee who does not satisfy the requirements of this subpart 
may still qualify as an exempt employee under other subparts of this 
rule.
 (b) A manufacturer's representative, for example, may perform 
various types of promotional activities such as putting up displays and 
posters, removing damaged or spoiled stock from the merchant's shelves 
or rearranging the merchandise. Such an employee can be considered an 
exempt outside sales employee if the employee's primary duty is making 
sales or contracts. Promotion activities directed toward consummation 
of the employee's own sales are exempt. Promotional activities designed 
to stimulate sales that will be made by someone else are not exempt 
outside sales work.
 (c) Another example is a company representative who visits chain 
stores, arranges the merchandise on shelves, replenishes stock by 
replacing old with new merchandise, sets up displays and consults with 
the store manager when inventory runs low, but does not obtain a 
commitment for additional purchases. The arrangement of merchandise on 
the shelves or the replenishing of stock is not exempt work unless it 
is incidental to and in conjunction with the employee's own outside 
sales. Because the employee in this instance does not consummate the 
sale nor direct efforts toward the consummation of a sale, the work is 
not exempt outside sales work.
 
 
 
Sec. 541.504 Drivers who sell.
 
 (a) Drivers who deliver products and also sell such products may 
qualify as exempt outside sales employees only if the employee has a 
primary duty of making sales. In determining the primary duty of 
drivers who sell, work performed incidental to and in conjunction with 
the employee's own outside sales or solicitations, including loading, 
driving or delivering products, shall be regarded as exempt outside 
sales work.
 (b) Several factors should be considered in determining if a driver 
has a primary duty of making sales, including, but not limited to: a 
comparison of the driver's duties with those of other employees engaged 
as truck drivers and as salespersons; possession of a selling or 
solicitor's license when such license is required by law or ordinances; 
presence or absence of customary or contractual arrangements concerning 
amounts of products to be delivered; description of the employee's 
occupation in collective bargaining agreements; the employer's 
specifications as to qualifications for hiring; sales training; 
attendance at sales conferences; method of payment; and proportion of 
earnings directly attributable to sales.
 (c) Drivers who may qualify as exempt outside sales employees 
include:
 (1) A driver who provides the only sales contact between the 
employer and the customers visited, who calls on customers and takes 
orders for products, who delivers products from stock in the employee's 
vehicle or procures and delivers the product to the customer on a later 
trip, and who receives compensation commensurate with the volume of 
products sold.
 (2) A driver who obtains or solicits orders for the employer's 
products from persons who have authority to commit the customer for 
purchases.
 (3) A driver who calls on new prospects for customers along the 
employee's route and attempts to convince them of the desirability of 
accepting regular delivery of goods.
 (4) A driver who calls on established customers along the route and
persuades regular customers to accept delivery of increased amounts of 
goods or of new products, even though the initial sale or agreement for 
delivery was made by someone else.
 (d) Drivers who generally would not qualify as exempt outside sales 
employees include:
  (1) A route driver whose primary duty is to transport products sold 
by the employer through vending machines and to keep such machines 
stocked, in good operating condition, and in good locations.
 (2) A driver who often calls on established customers day after day 
or week after week, delivering a quantity of the employer's products at 
each call when the sale was not significantly affected by solicitations 
of the customer by the delivering driver or the amount of the sale is 
determined by the volume of the customer's sales since the previous 
delivery.
 (3) A driver primarily engaged in making deliveries to customers 
and performing activities intended to promote sales by customers 
(including placing point-of-sale and other advertising materials, price 
stamping commodities, arranging merchandise on shelves, in coolers or 
in cabinets, rotating stock according to date, and cleaning and 
otherwise servicing display cases), unless such work is in furtherance 
of the driver's own sales efforts.
 
 

Note: The preceding information is only part of the federal overtime regulation. The reader is advised to read the entire regulation prior to making any decisions regarding overtime pay exemptions. The complete regulation can be found at: www.ibamember.com/fedovertime