In New York City, there are thousands of account executives, account representatives, enterprise sales account representatives and marketing representatives who hold very similar positions which involve a hybrid of different responsibilities, including sales, marketing and administration. These employees – often referred to more generically as “account representatives” or “account executives” – are responsible for developing new client accounts and for ensuring renewal business on existing client accounts. In this regard, account representatives are often involved in ongoing client service and providing administrative support to a company’s clients in addition to other sales and marketing efforts required to develop new business. Employees holding these and similar positions should be aware of the relevant FLSA overtime pay exemptions so that they can avoid being misclassified as administrative employees or outside salesmen (both overtime exempt) when job duties show otherwise. Unfortunately, these positions do not fall squarely into any single easily-defined job category for the purposes of determining the applicable FLSA overtime pay exemption.
However, helpful precedent is developing in the circuit courts which provides more guidance for account executives hoping to perform an FLSA exemption analysis. Within recent years, there have been a number of lawsuits brought on behalf of account executives who assert that they were wrongly classified as outside sales employees. In 2009, the Second Circuit Court of Appeals held that an advertising salesman for a magazine company was misclassified as an administrative employee and was not exempt from overtime provisions since she was responsible for raising sales specifically with respect to certain clients and did not have an obligation to “promote sales generally” as a marketing representative, a fact which would have rendered her an exempt employee (Reiseck v. Universal Communications of Miami, INC.) This month, a complaint was filed against JSD Management Inc. on behalf of collections agents and account executives seeking overtime pay due to misclassification (Jackson et. al. v. James Stevens & Daniels, Inc. et. al.)
According to the FLSA, in order to qualify for the outside sales exemption for overtime wages you must meet both of these requirements:
- The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
- The employee must be customarily and regularly engaged away from the employer’s place or places of business.
In order to qualify under the administrative exemption you must meet all three of the following requirements:
- The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
- The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
- The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
If you work as an account executive in NYC, are not receiving overtime wages, and do not believe that your job meets the outside sales or administrative exemptions under the FLSA, contact an attorney who specializes in wage and hour laws. Overtime pay recovery in cases such as these tends to be higher given the substantial salaries paid to account executives which are used to calculate an overtime pay rate, so the incentives for bringing suit tend to be higher for the average account representative. However, understand that your right to recover is limited by a statute of limitations, so move quickly to find counsel and preserve your claim by filing a lawsuit which stops the statute of limitations.
