| The Commonly held belief is that outside sales | | | | "Making sales" includes any sale, exchange, |
| representatives do not get overtime pay. This is | | | | contract to sell, consignment for sales, shipment |
| because the federal overtime law, the Fair Labor | | | | for sale, or other disposition. What is missing |
| Standards Act (FLSA), specifically exempts | | | | from either of these definitions is an exemption |
| outside sales reps from being paid overtime pay. | | | | for a person that merely urges doctors to |
| Normally, the FLSA requires an employer to pay | | | | prescribe certain drugs, but does not actually sell |
| its employees one and ½ times their regular | | | | anything to the doctor. |
| rate of pay if that employee works more than | | | | A recent case out of the 2nd Circuit Court of |
| 40 hours per week. | | | | Appeals held pharmaceutical sales representatives |
| In order for an outside sales representative to be | | | | that merely urge doctors to prescribe certain |
| exempt from receiving overtime pay, there are | | | | drugs, under strict guidelines from their employer, |
| several requirements that must be met. These | | | | are entitled to overtime pay. In In Re Novartis |
| are: | | | | Wage and Hour Litigation, the Court states that a |
| 1. The employee's primary duty must be making | | | | pharmaceutical sales representative that meets |
| sales (as defined in the FLSA), or obtaining orders | | | | with doctors to obtain a doctor's commitment to |
| or contracts for services or for the use of | | | | prescribe a certain drug does not engage in "sales" |
| facilities for which a consideration will be paid by | | | | as contemplated by the FLSA. |
| the client or customer; and | | | | Novartis also tried to argue that their "sales" reps |
| 2. The employee must be customarily and | | | | were exempt from overtime pay because of the |
| regularly engaged away from the employer's | | | | administrative exemption. However, the Court |
| place or places of business. | | | | stated that the reps did not exercise discretion |
| At first glance, it seems as if a pharmaceutical | | | | and independent judgment simply because the |
| sales representative would not be entitled to | | | | reps could answer the doctor's questions about |
| overtime pay. However, the distinction lies in | | | | the medications. Based upon this holding, it is |
| how the FLSA defines "primary duty" and "making | | | | anticipated that drug companies will make changes |
| sales" | | | | to their sales representatives responsibilities so as |
| "Primary duty" means the principal, main, major or | | | | to avoid having to pay their reps overtime pay, |
| most important duty that the employee | | | | despite the long hours worked by these reps. |
| performs. Determination of an employee's primary | | | | For more information about overtime pay for |
| duty must be based on all the facts in a particular | | | | pharmaceutical reps, or other questions relating to |
| case, with the major emphasis on the character | | | | whether a certain employee is entitled to |
| of the employee's job as a whole. | | | | overtime pay, contact attorney Joseph M. |