Understanding Overtime Entitlement for Inside Salespeople in the Post-Pandemic World

If you work in sales, you probably work long hours. It takes a lot of work to nurture clients and close deals. Did you know that you may now be eligible for overtime where previously you were exempt from this extra money?



Here’s a review of how overtime laws have changed for salespeople over the last few years. The pandemic was a major force in changing how salespeople conducted business. Now, the rules have changed, and you need to know about them to get money you rightfully earn.

Pre-Pandemic Exemptions from Overtime for Salespeople

Prior to the coronavirus pandemic, most overtime salespeople were not eligible for overtime pay, regardless of how many extra hours they worked. The legal definition of being ineligible is called being “exempt.”

Why were most salespeople exempt? They weren’t able to collect overtime pay because they were considered “outside” employees. That is, they didn’t work in the office but spent most of their time calling on clients in their sales territories.

If you spent 50 percent or more of your time working outside of your employer’s place of business, you were technically considered exempt from overtime. Your employer’s place of business might be their office, or it could be your home office that serves as a hub for your activities. “Outside the employer’s place of business” meant making sales calls or going door to door.

How the Coronavirus Pandemic Changed Everything

When the pandemic began in early 2020, many businesses and offices closed down — some for months or even years at a time. Sales professionals had to change their business model for “seeing” clients.

If you’re like most folks in sales, you probably resorted to Zoom calls or other forms of video meetings. You might have called some customers on the phone instead of meeting them in person.

Business closures were a way to reduce the spread of coronavirus (aka COVID). As time went on, many people found that working remotely was actually more efficient. It saved money for the company (utilities, supplies, food, etc.), and employees didn’t have to waste time commuting to work.

Some businesses closed physical locations entirely. Others reduced staff office hours, letting people continue to work from home or working hybrid schedules — part time in the office, part time at home.

If you were a salesperson, your own company may have engaged in this new way of doing business. Or, perhaps your clients were now operating differently.

However, by the time late 2022 and early 2023 rolled around, some other businesses found the remote work model detrimental. They were paying for office space, but no one was using it. Others were suspicious of employees not working as hard when they were at home, in spite of studies that show productivity generally increases with remote work.

Now, here we are in 2024, and work models are all over the place. Some companies are still operating remotely or with hybrid employees. Others have mandated a return to work.

And while we may use the term “post-pandemic,” COVID and long COVID still concerns for many workers, especially those who are immunocompromised or who have people with fragile health at home. Regulations for masking and restrictions come and go with spikes, alongside worsening statistics for other respiratory viruses, like flu and RSV.



Some salespeople are working more remotely for their own safety. In other instances, they have to work remotely because their clients no longer want to meet in person or have shifted to an off-site work model. Everything is different from the way it was in 2019.

Current Overtime Laws for Employees Who Are Now Inside Salespeople

Because of the radical transformation in how sales are conducted today versus a few years ago, it was clear the legal definition of an “outside salesperson” had to change. While the law itself didn’t change, per se, the legal interpretation of it has.

It’s important you understand this if you work in sales because it changes your entitlement to overtime pay.

There are two parts to the law: 1) how much time you devote to selling and 2) where you work.

First, if less than 50 percent of your time is devoted to selling, you are not exempt from overtime. You are, in fact, eligible for overtime. What constitutes selling?

• Making direct sales
• Activities necessary to make sales, like taking orders

Delivering orders or driving to a delivery destination is not considered selling.

Now, here’s the important second part that’s new. No matter where you work, you are not exempt. That means, your employer cannot require you to be in the office or in “the employer’s place of business” (including your home office) to qualify for overtime pay if you work extra hours doing non-selling tasks.



So, if you’re using Zoom calls or other remote means to meet virtually with clients, that doesn’t exclude you from overtime. You might also be doing business remotely with your manager or sales team. That doesn’t make you exempt from overtime either. You are considered an “inside” salesperson.

How Overtime Pay Is Calculated in California

If you’ve historically been exempt from overtime pay, you may not even be familiar with how it’s calculated. Here’s a review of the law specifically for California employees:

• For all hours in excess of 8 hours and including 12 in any given workday, you must be paid 1½ times your regular hourly rate of pay. The same goes for the first 8 hours worked on a 7th consecutive day of work.
• For all hours above 12 hours in any given workday, you must be paid double (2 times) your regular hourly rate. The same goes for any hours over 8 hours on the seventh consecutive day of work.

Even if you are paid a salary, not an hourly wage, or paid by the piece, your overtime rate can be calculated to ensure you get the extra pay you deserve.

What If Your Employer Is Not Following the Law on Overtime Pay? How an Employment Attorney Can Help

As you might imagine, some employers try to skirt the law on overtime by claiming their employees are really “outside” salespeople when they’re not. They change the realistic expectations of the job to get out of paying overtime.

Perhaps this has happened to you. Or maybe your employer has suddenly made salespeople independent contractors (aka freelancers or self-employed workers) when they are really still employees. This is known as “1099 misclassification,” named for the 1099 tax form independent contractors receive.

If your Los Angeles area employer is not paying you the overtime you are due, an employment lawyer like Employee Law Group can assist you. They can help you make sure you indeed have a case of failure to pay overtime.

Then, they can advise you on the next steps. That might be documenting evidence of violation of the law or other infractions like discrimination or harassment. It could be contacting your employer on your behalf or helping you file an official complaint. It might also be representing you in court should you decide a lawsuit is your only option.

Loss of overtime pay means you are not getting paid for your hard work. It affects your ability to meet your personal financial obligations. You don’t have to put up with it.

An initial consultation with Employee Law Group is completely free and does not obligate you to further action. To set up your complimentary appointment, call us today at 310-407-7358, or reach out online to let us know how we can assist you.