Outside sales in PR: what you lose and what you keep

The only exemption that does not require you to earn anything

Every FLSA white-collar exemption has a number to clear. Executive, administrative and professional require a salary, in Puerto Rico, $455 a week. Computer employees require that salary or $27.63 an hour. Highly compensated requires $107,432 a year.

**Outside sales requires none.** The U.S. Department of Labor says so without ambiguity in Fact Sheet 17F: **"the salary requirements of the regulation do not apply to the outside sales exemption."** It repeats it on the salary levels page, in the note beneath the table: those thresholds do **not** apply to certain employees, outside sales among them.

Think about what that means. An outside salesperson can qualify as exempt **earning whatever**, pure commission, a token base, nothing guaranteed. There is no floor to clear. And the Section 13(a)(1) exemption is not overtime only: it is **from minimum wage and overtime at once**.

That is why this category has to be understood rather than accepted because the employer names it. Everything turns on whether you actually meet the two duties conditions, which are the only ones that exist here.

The two conditions, and the "fixed site" trap

To qualify, the employer must ensure **both** are met:

The second is where nearly everything collapses. Fact Sheet 17F defines "away from the place of business" with a precision worth reading slowly: **an outside sales employee makes sales at the customer's place of business or, if selling door-to-door, at the customer's home**. And it closes: **outside sales does not include sales made by mail, telephone or the Internet**, unless such contact is used merely as an adjunct to personal calls.

Then comes the line that decides more cases than any other: **any fixed site, whether home or office, used by a salesperson as a headquarters or for telephonic solicitation of sales is considered one of the employer's places of business, even though the employer is not in any formal sense the owner or tenant of the property**.

Read that applied to Puerto Rico. An "outside salesperson" who really spends the day calling and messaging from home, going out to visit now and then, is working from one of the employer's places of business under this rule. Their house counts as a company office. And if they are not "customarily and regularly" away, the exemption does not hold.

"Customarily and regularly" has its own definition: **greater than occasional but less than constant**; it includes work normally done every workweek, but does **not** include isolated or one-time tasks.

• That the employee's **primary duty** is **making sales** as defined in the FLSA, or **obtaining orders or contracts** for services or for the use of facilities for which the client will pay consideration.
• That the employee is **customarily and regularly engaged away** from the employer's place or places of business.

What counts as a sale, what counts as promotion, and drivers who sell

"Sales" is broader than it looks: it includes any sale, exchange, contract to sell, consignment for sale, shipment for sale or other disposition. It includes the transfer of title to tangible property and, in certain cases, of tangible and valuable evidences of intangible property.

Obtaining orders for "the use of facilities" also has concrete content, and the fact sheet gives the examples: selling time on radio or television, soliciting advertising for newspapers and other periodicals, and soliciting freight for railroads and other transportation agencies. The word "services" extends the exemption to someone who sells or takes orders for a service **that will be performed for the customer by someone else**.

**Promotion** work is where many positions get misread, and the rule is a clean line: promotion actually performed **incidental to and in conjunction with the employee's own outside sales or solicitations** is exempt work. Promotion incidental to sales made (or to be made) **by someone else** is **not** exempt outside sales work. If your day goes into setting up displays and supporting other people's sales, that is not your exemption.

And there is a category that carries weight here: **drivers who sell**. A driver who delivers products and also sells them may qualify as an exempt outside sales employee **only if the primary duty is making sales**. The fact sheet lists the factors compared: how the duties stack against those of other employees working as drivers and as salespersons; whether there are customary or contractual arrangements about amounts of product to be delivered; whether the driver holds a selling or solicitor's license where law requires one; how the collective bargaining agreement describes the occupation; and other factors set out in the regulation. In Puerto Rico, where the distribution route with retail selling is a common model, that analysis decides many paychecks, and it crosses the motor carrier exemption we cover in another guide.

In Puerto Rico three more exclusions stack on top

This is the part you will not find in any federal fact sheet, because federal fact sheets do not speak to our laws. In Puerto Rico an outside salesperson does not lose only what the FLSA takes.

**First, the hours law.** **Article 13 of Act 379 (29 L.P.R.A. § 285)**, in the text in force under the April 15, 2024 revision, says the law shall not apply, in subsection **(b)**, to "traveling agents, itinerant salespersons and outside salespersons, as those terms are defined by regulation of the Secretary of Labor and Human Resources." It is Puerto Rico law's **own** exclusion: it does not depend on the FLSA exempting you, though subsection (f) of the same article would take you out that way too.

**Second, the rest day.** The Department of Labor and Human Resources itself, in its *Guides for the Interpretation of Puerto Rico Labor Legislation* (first edition, May 8, 2019), explains that **Act No. 289** (the weekly rest day and its premium pay) shall **not apply** to the same list from Act 379, naming expressly "traveling agents, itinerant salespersons and outside salespersons." The Guides spell out the consequence: **"The working conditions of these employees shall be governed by the individual or collective employment contract, and the manuals and regulations applicable to them."**

Translated: for an outside salesperson in Puerto Rico, **the contract and the employer's manual are the law**. Which is why in this category more than any other, what you signed matters. Read it before signing, and keep a copy.

**Third, vacation and sick leave.** The same Guides describe **Act 180-1998** as uniforming the sick and vacation leave accrued by **non-exempt** private-sector workers in Puerto Rico. The accrual that law guarantees is written for the non-exempt worker.

What you do keep, and the Christmas bonus is the big example

With so many exclusions stacked, many conclude an outside salesperson has no rights. That is false, and here is the point most often gotten wrong in Puerto Rico.

The **Act No. 148 Christmas bonus** is yours. The DTRH Guides say it plainly: **"Both non-exempt employees and professionals, executives and administrators are entitled to the bonus established by Act No. 148."** And the exclusion list is closed and does not mention salespeople: **independent contractors, persons employed in agricultural activities, in domestic service or in family residences, or in charitable institutions, and employees of the Government of Puerto Rico and each of its three branches**.

Note the first of those exclusions, because sales is where it is most abused: **independent contractors**. If you were classified as an independent contractor while actually working as an employee, that is not an exemption argument but a classification one, a different and bigger problem.

Nor does the rest of Puerto Rico labor law that does not depend on this exemption disappear. Protection against unjust dismissal, discrimination, harassment, reasonable accommodation, maternity leave, the State Insurance Fund and SINOT run on their own statutes with their own requirements, and none of them switches off because the FLSA calls you an outside salesperson.

One point stays unresolved, and we would rather declare it than invent an answer: whether Puerto Rico's **$10.50 minimum wage** reaches someone exempt under the FLSA. Act 47-2021 applies its increases to workers "covered" by the FLSA, and neither that law nor the DTRH Guides define whether an FLSA-exempt worker is "covered" for that purpose. We will not settle it here. What can be said with confidence is that the FLSA outside sales exemption only holds if both duties conditions are genuinely met, and that is the question to ask first.

How to check whether you really are an outside salesperson

Do this exercise with a normal week, not your best one. Write down where you were each hour: at the customer's home, at the customer's business, at the office, at your house. The question is not how much you sold but **where you were** when you sold it.

Then separate the calls and messages. If most of your sales close by phone, WhatsApp or email from a fixed site, the federal fact sheet is explicit: that is **not** outside sales, unless such contact is merely an adjunct to personal calls. And that fixed site counts as the employer's place of business even when it is your own home.

Third, look at your primary duty. Do you sell, or support someone else's selling? Promotion incidental to another person's sales is not exempt work. And if you also deliver product, the question is whether the primary duty is selling or delivering.

Fourth, pull out the contract and the employer's manual. Under the DTRH Guides, for an outside salesperson those documents govern working conditions. That is where your vacation, rest and commission terms live, and what is not written is not presumed.

If at the end of the exercise the exemption looks shaky, there are two routes to claim: the confidential complaint with the Wage and Hour Division, which has a Puerto Rico office in Guaynabo, and the Act 2 of 1961 summary procedure in court. We cover them separately in the guides below.