FLSA2006-16 — Charitable donation solicitors and outside sales under section 13(a)(1)

U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210

May 22, 2006 FLSA2006-16

Dear Name*:

This is in response to your letter inquiring whether “residential” and “roaming” solicitors who solicit charitable
donations are exempt outside salespersons under section 13(a)(1) of the Fair Labor Standards Act (FLSA) (copy
enclosed). For the reasons that follow, it is our conclusion that soliciting charitable contributions is not exempt
“outside sales” work under the FLSA.

Your client is a for-profit professional fundraising business that solicits charitable contributions on behalf of various
charitable organizations. The solicitors in question have a primary duty of soliciting donations to charitable
organizations through in-person contact in public areas. There are two different types of solicitors: residential
solicitors, who solicit in the same geographical area on a regular basis, and roaming solicitors, who travel
throughout the country to conduct solicitations. All of the solicitations occur outside of the employer’s place of
business. The residential solicitors report to the employer’s office each morning to receive materials needed for the
solicitations and report back to the office at the end of the day to communicate the day’s results. The roaming
solicitors travel as a team and attend staff meetings in the evenings for discussions related to the solicitations.

The outside sales exemption is set forth in FLSA section 13(a)(1) and is defined in 29 C.F.R. §§ 541.500-.504
(copies enclosed). The regulations addressing the outside sales exemption have been revised since we received your
inquiry, and the revised regulations became effective on August 23, 2004 (69 Fed. Reg. 22,122 (Apr. 23, 2004)). An
outside sales employee is “any employee”:

1) Whose primary duty is:
(i) making sales within the meaning of section 3(k) of the [FLSA], or
(ii) 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
2) Who is customarily and regularly engaged away from the employer’s place or places of business in
performing such primary duty.

29 C.F.R. § 541.500. Section 3(k) of the FLSA (copy enclosed) defines sale as including “any sale, exchange,
contract to sell, consignment for sale, shipment for sale, or other disposition.”

When the FLSA’s outside sales employee exemption was first defined and interpreted by the Wage and Hour
Division, early questions were raised concerning what are qualifying “sales” under this exemption. As described in
the 1940 Report and Recommendations of the Presiding Officer at Hearings Preliminary to Redefinition:

[T]he Division has expressed the opinion that the word “sales” as defined in section 3(k) does not cover
certain activities which are popularly described as sales. Particular reference is made to the selling of time
on the radio, the solicitation of advertising for newspapers and other periodicals and the solicitation of
freight for railroads and other transportation agencies. * * * Accordingly, it is deemed desirable to add a
further clause which will specifically include within the exemption persons engaged in selling activities of
this type.

* * * In extending the scope of the term “outside salesman” to include such employees as radio time,
advertising, and freight solicitors, it is not intended to include persons who in a very loose sense are
sometimes described as selling “service.”

There have been frequent requests for inclusion within the exemption of outside buyers, both of a general
type and the special type employed by renderers (footnotes omitted). It has been alleged that these persons
are engaged in selling their employer’s “service” to the person from whom they obtain their goods. While
occasionally the phrase “selling service” is used in this sense in common speech, it is obvious that the
relationship here is the reverse of that of salesman-customer. Congress might have included an exemption
for outside buyers in the act, if it had so desired, but it would clearly be a violation of the Administrator’s
power of definition and delimitation to include within an outside salesman exemption the exemption of the
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U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210

salesman’s opposite and counterpart, the outside buyer. Similarly, requests to include as outside salesmen
such employees as service men, installation men, delivery men, and collectors must be denied as lying
outside the scope of the Administrator’s authority.

“Executive, Administrative, Professional . . . Outside Salesman” Redefined, Wage and Hour Division, U.S. Dep’t of
Labor, Report and Recommendations of the Presiding Officer (Harold Stein) at Hearings Preliminary to
Redefinition, at pp. 45-46 (Oct. 10, 1940).

The regulations were revised in 1949 to include persons engaged in obtaining orders or contracts for “services” in
the definition of outside sales, but the remaining underlying concepts were not changed. See Report and
Recommendations on Proposed Revisions of Regulations, Part 541, by Harry Weiss, Presiding Officer, Wage and
Hour and Public Contracts Divisions, U.S. Dep’t of Labor, at pp. 81-82 (June 30, 1949). Accordingly, when
applying these principles in response to requests for opinions, the Division has concluded, for example, that
soliciting organ and tissue donors by selling the concept of being a donor does not constitute “sales” under the
regulations. See WH Opinion Letter August 19, 1994 (copy enclosed).

We view the activities of the solicitors of charitable donations that you describe to be very similar to these activities
previously determined to be non-exempt. Soliciting promises of future charitable donations or “selling the concept”
of donating to a charity does not constitute “sales” for purposes of the outside sales exemption. In the case of your
client, the solicitors do not obtain orders or contracts for services or for use of your client’s facilities for which a
consideration will be paid. Furthermore, the exchange of a token gift for the promise of a charitable donation does
not constitute a “sale” or “selling” for purposes of the outside sales exemption. Therefore, it is our opinion that the
solicitors, whether “residential” or “roaming,” who solicit charitable donations do not qualify for the outside sales
exemption under the FLSA and must be paid in accordance with the FLSA’s minimum wage and overtime
requirements.

This opinion is based exclusively on the facts and circumstances described in your request and is given based on
your representation, express or implied, that you have provided a full and fair description of all the facts and
circumstances that would be pertinent to our consideration of the question presented. Existence of any other factual
or historical background not contained in your letter might require a conclusion different from the one expressed
herein. You have represented that this opinion is not sought by a party to pending private litigation concerning the
issue addressed herein. You have also represented that this opinion is not sought in connection with an investigation
or litigation between a client or firm and the Wage and Hour Division or the Department of Labor. This opinion is
issued as an official ruling of the Wage and Hour Division for purposes of the Portal-to-Portal Act, 29 U.S.C. § 259.
See 29 C.F.R. §§ 790.17(d), 790.19; Hultgren v. County of Lancaster, 913 F.2d 498, 507 (8th Cir. 1990).

We trust that this letter is responsive to your inquiry.

Sincerely,

Alfred B. Robinson, Jr.
Acting Administrator

Enclosures
FLSA §§ 3(k) and (s) and 13(a)(1)
29 C.F.R. §§ 541.500-.504
WH Opinion Letter August 19, 1994

Note: * The actual name(s) was removed to preserve privacy in accordance with 5 U.S.C. § 552(b)(7)
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