The Fair Labor Standards Act (FLSA) dates to 1938 before the advent of pharmaceutical sales representatives (Coke in one variety or another sufficed for drugs back then–just kidding). However, a modern-day court battle is raging over whether PSRs are exempt from FLSA overtime rules.
A Connecticut court held recently that they are not exempt since pharma reps make no sales; they just introduce products and give samples to physicians and medical professionals. Most other courts, however, count them as exempt in an FLSA-defined capacity as "outside salespersons." The reasoning here often goes that the duties they perform are virtually unsupervised and resemble sales calls in almost every way, and on top of that they often receive commission checks when the products they promote are prescribed.
The most recent pro-exempt ruling came in an Arizona federal district court in the case of Christopher v. SmithKline Beecham.
On the losing end were the PSRs themselves who were seeking "lost" overtime pay for prior service. They argued that, since the Food and Drug Administration (FDA) forbids sales of pharmaceuticals to either physicians or patients, they could not be classified as salespeople and thus were non-exempt and eligible for overtime pay.
As you can see from this example, classifying employees as exempt (no overtime) and non-exempt (always eligible for overtime) can prove a challenging task. Our FLSA Overtime Rules Compliance Kit can help you properly classify your workforce. Get your copy today.