California Outside Sales Exemption (2023)

Under California labor law, there are 4 categories of California exempt employees. One of those categories is the California outside sales exemption.

Employees who do not meet the criteria for an “exempt outside salesperson” in California are misclassified as exempt.

To be properly classified as “exempt” under the California labor code, an outside salesperson must be an employee who regularly spends over half their work time engaged in sales away from the employer’s place of business.

This means that if an employee spends a significant amount of time doing duties other than sales, or a substantial amount of time doing sales calls while inside the employer’s office building, then that employee’s job may not qualify for the outside salesperson exemption.

Commonly misclassified employees under California’s outside sales exemption

The outside sales exemption is one of the most misunderstood and misapplied exemptions by both employers and employees. Unfortunately, workers who are misclassified as outside sales employees may not be getting the overtime pay and other benefits they would be owed if correctly classified.

Commonly misclassified workers under the outside sales exemption include:

• Pharmaceutical sales representatives
• Insurance salespersons
• Commissioned delivery drivers
• Manufacturer’s representatives that do marketing and merchandising at retail stores