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Inside Salespersons – Misclassification As Exempt From Overtime Pay

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Some employers incorrectly classify inside salespersons as exempt from receiving minimum wages and overtime pay. Typically, for an employer to claim an inside salesperson is exempt from the federal overtime protections, it must show that the establishment is retail in nature, that more than 50% of the worker’s pay is commissions, and that the worker earns at least 1.5 times the federal minimum wage.

Inside sales employees are often paid on a salary or a salary plus commission basis. However, if they are not making more than 50% of their pay in commissions, the employer cannot deny them overtime pay under the retail sales or service exemption.

Understanding overtime exemptions can be complicated for workers. Our wage and hour lawyers are happy to help you determine if you are being paid the correct wages under the law. If you believe you may have been misclassified as exempt from overtime pay, or would like to discuss whether you may be eligible to make a claim, please contact us.

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