Could Your Remote Sales Team Be Misclassified?
As remote and hybrid work arrangements have become more common, many employers have revisited how they classify employees. One area that continues to create confusion involves sales roles.
It's easy to assume that employees who spend most of their time selling products or services qualify for the outside sales exemption. However, the reality is more nuanced than many employers realize.
What is the outside sales exemption?
Under the Fair Labor Standards Act (FLSA), employees generally must meet specific criteria to qualify for the outside sales exemption.
In broad terms, the employee must be:
Primarily engaged in making sales or obtaining orders, and
Customarily and regularly working away from the employer's place of business.
This second requirement is where employers often encounter problems.
Why does remote work complicate things?
Many organizations shifted to remote work quickly and successfully. Employees adapted, technology improved, and businesses continued moving forward.
However, an employee working primarily from home, making sales by phone, email, or video conference, may not necessarily meet the requirements of the outside sales exemption.
In many situations, a home office may be treated as one of the employer's places of business for purposes of this analysis.
As a result, employees who primarily sell remotely may still be entitled to minimum wage and overtime protections unless another exemption applies.
How do employers get this wrong?
Often, it happens because the role has evolved.
An employee who once spent much of their time meeting clients in person may now conduct nearly all interactions virtually. A company may retain the same classification without reevaluating whether the employee's day-to-day responsibilities have changed.
The title remains the same, but the work looks very different.
Questions employers should ask
If your organization has remote sales employees, consider the following:
How are these employees actually performing their work?
Are they regularly meeting customers outside of their home environment?
Has the role changed since the employee was initially classified?
Have remote work arrangements altered the assumptions behind the original exemption decision?
Reviewing these questions periodically can help employers identify potential concerns before they escalate.
Why this matters for affiliate partners
Trusted advisors often help clients navigate changing workforce models, including remote and hybrid work arrangements. As organizations continue to adapt, employment practices that worked well in the past may warrant another look.
Encouraging clients to revisit employee classifications as roles evolve can help reduce risk while supporting informed business decisions.
A Final Thought
Remote work has transformed the way many businesses operate, but it has not eliminated the need to periodically review wage and hour practices.
When the way work is performed changes, employers should take the opportunity to ask whether existing classifications still fit today's reality.
The HR MRI Assessment® helps employers identify critical, major, and administrative concerns across their HR practices, including areas where evolving workplace models may have created unintended compliance exposure. Taking a proactive approach can help businesses adapt with confidence while protecting what they've built.