R994-205-107. Exempt Outside Sales

The Act excludes the services of salespersons if the services are performed outside the employer's place of business, the salesperson is paid solely by way of commission, the services are not employment at common law, and the services are not employment as a traveling or city salesperson defined in Subsection 35A-4-204(2)(i).

(1) The employer's place of business is defined as an establishment where business is conducted, services are rendered, retail sales are made, or goods are manufactured, stored, or processed. This definition also includes temporary places of business such as booths or exhibits at trade shows, fairs and festivals.

(2) A commission is defined as a payment calculated as a percentage of the sales volume or value. Outside sales services are exempt if all such services are paid solely by way of commission.

(a) If any part of the payment for outside sales services is a salary, all of the services are covered employment and the total payment, salary and commission, is subject to contribution payments.

(b) If a worker is guaranteed a minimum salary for any pay period in which sales commissions are less than the guaranteed minimum, all earnings are subject to contribution payments when the worker is paid the guaranteed salary. In any pay period in which the commissions equal or exceed the guaranteed salary, the earnings are considered to be solely by way of commission and are not subject to contribution payments.

(c) If the worker is given advances against future commissions and is required to repay any advances that exceed the commissions, the advances are considered to be payment solely by way of commission.

(d) If a worker performs both outside commission sales services and other salaried services, such as an accountant, the sales are excluded from employment and the other services are included in covered employment. However, if the payment for all services is for the same pay period, the "included and excluded" provisions of Subsection 35A-4-205(2) are applied.

(3) Employment at common law is defined by the Internal Revenue Service's current common law rules.

(4) An outside salesperson may perform incidental activities at the employer's place of business, such as writing up and transmitting orders, replenishing sales supplies, or attending sales meetings, provided such activities are not routine, without losing the classification as an outside salesperson.