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GlaxoSmithKline Sales Rep California Overtime
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A lawsuit was filed on behalf of GlaxoSmithKline sales reps alleging they were misclassified as exempt from California overtime and should have been paid overtime for their work as California GlaxoSmithKline sales representatives. Although the California GlaxoSmithKline sales representatives lawsuit resulted in a verdict for the defendant, other similar lawsuits filed against different companies have resulted in victories for the pharmaceutical sales representatives. Lawsuits involving California pharmaceutical sales representatives have been filed, alleging pharmaceutical companies violated California overtime law by misclassifying California sales reps as exempt from overtime.
Under California overtime law, employees are entitled to one-and-one-half times the regular rate of pay for all hours worked that are in excess of eight hours in a workday. Furthermore, under both California overtime laws and the Fair Labor Standards Act (FLSA), employees are entitled to overtime pay for working more than 40 hours in a workweek.
California Overtime and GlaxoSmithKline Sales Representatives
Under the Fair Labor Standards Act (FLSA), people who are involved in outside sales are typically considered exempt from overtime pay. That is because people involved in outside sales have unlimited earning potential due to their commissions—the more they sell, the more they can make.
California GlaxoSmithKline Pharmaceutical Sales and the Fair Labor Standards Act
For a long time, pharmaceutical sales representatives were considered exempt from overtime pay. They could be considered exempt on one of two counts: either as outside sales people or under the administrative exemption, if they have discretion and authority in their job.
California GlaxoSmithKline Sales Overtime Pay
Some recent lawsuits, however, have resulted in the courts determining that some pharmaceutical sales reps are not exempt from overtime pay—that is, they should be paid overtime for their hours worked—because they do not fall under either the outside sales exemption or the administrative exemption.
A lawsuit filed against GlaxoSmithKline alleged that GlaxoSmithKline sales representatives should be paid overtime because they do not meet the requirements for overtime exemption. The Ninth Circuit Court of Appeals found that GSK sales representatives are not entitled to overtime because they are defined as "salesmen," filling the requirement for outside sales exemption.
California GlaxoSmithKline Sales Representative Overtime Lawsuit
This finding contradicts the Second Circuit Court of Appeals, which found in the Novartis sales representative lawsuit that Novartis sales representatives should be eligible for overtime pay because their job is not directly involved in sales.
The judges in the GlaxoSmithKline sales representative lawsuit found that some salespeople earned compensation that made up to 41 percent of their gross income, making them ineligible for overtime pay. Outside sales people are considered exempt from overtime because commissions and incentives mean their earning potential is virtually unlimited.
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