Q. I am 100% commission sales person; I do receive benefits such as medical insurance, and taxes are taken out of my pay so I am a W2 employee, not a 1099. My company requires us to attend a weekly meeting that lasts from 1-3 hours. Am I entitled to compensation for that time?
A. Many companies make significant investments in training for their commissioned sales people. They provide marketing materials, technology, and in-house support staff, in addition to some type of regularly scheduled meetings designed to help make sales people more effective. You may not agree about the value of these meetings. You may be looking for a legal opinion, and the state and federal laws pertaining to the payment of wages are complex. I consulted Barry Miller, an employment attorney specializing in wage and hour matters at Seyfarth Shaw in Boston.
Attorney Miller explains, "An employer is not required to pay a properly classified sales employee for time spent at meetings. While most employees must be paid at least a certain minimum wage for all hours worked (and mandatory meetings would usually be considered "work"), there are a number of exceptions. Both state and federal law provide an exemption to minimum wage requirements for employees engaged in "outside sales."
Sales people spend many hours doing work they are not immediately compensated for. They target accounts, research prospects, make presentations, attend professional association meetings, write proposals, and the list goes on. Effective commission plans are structured to compensate them for all the activities when a sale is made.
Barry further explains, "Employees who are primarily engaged in making sales calls away from their employer’s place of business meet this exemption. The law recognizes that such employees are paid for all of their working efforts based on the commissions they receive, and they need not be paid extra hourly compensation for meetings or other activities that are undertaken in addition to their sales calls."
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Patricia Hunt Sinacole is president of First Beacon Group LLC, a human resources consulting firm in Hopkinton. She works with clients across many industries including technology, biotech and medical devices, financial services, and healthcare, and has over 20 years of human resources experience.
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