Do outside sales reps get OT? If you are the drug company Novartis, the answer is YES. In July, Novartis lost a court case brought by their outside sales reps, claiming they were not really exempt employees. The federal Second Court of Appeals ruled that Novartis’ sales reps did not meet the qualifications to be exempt from overtime. Why? The sales reps did not really make sales. Federal law forbids pharmaceutical company reps from selling drugs to doctors, drug stores, or patients. They can hand out samples and get “commitments” to buy, but the purchases are done through wholesalers. Novartis was in violation of wage and hour regulations.
Lesson learned: Make sure all of your employees who are classified as “exempt” meet the government standards. You really don’t want the headache of a Wage and Hour lawsuit. When in doubt, classify the person as non-exempt and pay the overtime.
What to do: The Department of Labor (DOL) provides an easy online tool to check whether a position should be exempt or not:
Further Help: State your employee classifications in your company’s Employee Handbook. Also, explain the allowed deductions for exempt employees. For help designing a new Employee Handbook, see New Wind Business Solution’s website: