If you are a salesperson working from home, California’s outside sales exemption (OSE) applies to you if you spend more than half of your working time away from home making sales or obtaining orders.1
So if you work primarily in your home office in California, then you would not be exempt under the OSE.
What is the outside sales exemption in California?
Under the outside sales exemption (OSE), you are classified as an exempt employee if you are a salesperson who spends more than 50% of your time outside of your employee’s place of business. Your home office is considered part of your employer’s “place of business.”2
As an exempt employee, you would not be entitled to such wage and hour benefits as:
What is an outside salesperson?
California law considers you an outside salesperson if you meet three conditions:
- Being at least 18 years of age;
- Customarily and regularly working more than 50% of your working time outside of your employer’s place of business (including your home office); and
- Selling items or obtaining service orders.4
The classic example of an outside salesperson is a door-to-door salesman. Other examples of outside sales activities are:
- commuting to and from a customer’s home or office,
- meeting with a customer outside of your office,
- loading a car with products to be sold, and/or
- doing promotional work outside of your office
What about inside salespeople working from home?
If you work as an inside salesperson in California, you are an exempt employee if the following three conditions are met:
- More than 50% of your compensation is from commissions;
- You earn at least 150% more than minimum wage; and
- You work in either:
- the mercantile industry;
- a mechanical occupation;
- a clerical occupation;
- a technical occupation; or
- a professional occupation5
It does not matter whether you work from your employer’s office or your home office.
Note that unlike most exempt employees, exempt inside sales employees are entitled to rest breaks and meal breaks.6
What can I do if I am misclassified?
If you are an outside salesperson who spends at least 50% of your working time at your employer’s place of business (which includes your home office), then you may qualify for non-exempt employee status in California.
If your employer insists on misclassifying you as exempt under the outside sales exemption, then you can either:
A California labor law attorney can help you decide which is the best route for you to take. In either case, your attorney would help you fight for all the back pay you are entitled to.
- 8 CCR 11070. See also Duran v. U.S. Bank National Assn. (2014) 59 Cal.4th 1 (“California’s wage order definition ‘takes a purely quantitative approach’ and focuses exclusively on whether the employee spends more than half of the workday engaged in sales activities outside the office. . . . The exemption requires scrutiny of both the job description and an employee’s own work habits.”).
- See 29 CFR § 541.502.
- 8 CCR 11040.
- See note 1. See also Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785.
- Wage Order 7. Wage Order 4. 8 CCR 11040 & 11070.
- How to File a Wage Claim, Division of Industrial Relations.