• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Advertise
  • About Craft Brewing Business

Craft Brewing Business

Professional Insight, Unfiltered

Craft Brewing Business Craft Brewing Business
  • News
  • Business & Marketing
  • Packaging & Distribution
  • Equipment & Systems
  • Ingredients & Supplies
  • Webinars & White Papers
  • News
  • Business & Marketing
  • Ingredients & Supplies
  • Packaging & Distribution
  • Equipment
  • Webinars & White Papers
  • COVID-19

Brewery Compensation Series part 2: Paying the sales team

October 15, 2015Kathleen Spero

sales team compensation
Uh oh – stuck on exactly how much you need to write in that patriotic compensation check? Better read the comprehensive feature below.

This Brewery Compensation series is intended to provide guidance on the variety of compensation structures for common positions in the brewing industry. As with part 1, the information here in part 2 is designed to highlight common issues with compensation and is not a definitive guide to the specific federal and state laws that govern payment of employees and independent contractors. Therefore, always consider consulting a legal professional regarding your specific situation.

The first article in the series dealt with compensation for employees working on the brewing side of operations – head brewers, brewmasters, assistant brewers and other related positions. In part 2, we will look at issues specific to the sales team. These individuals are often the first representative of your brewery in the field, responsible for developing new business and serving as the “rainmaker” for the brewery. Individuals working in the sales field tend to be outgoing and self-motivated, who are drawn to the field because of their independence and enjoyment working with people. Members of the sales team typically spend considerable time outside of the office and are often compensated based on commissions or other per-sale compensation formulas. These employees may be taking over relationships the owners have spent time building and developing and come to represent the face of the business to the outside community.

Independent contractor or employee?

As with all new hires, the first step in bringing on a new worker is to determine whether the individual will be an employee or an independent contractor. The factors for this test are covered heavily in the first article in the Brewery Compensation series. In general, because of the nature of the work, members of the sales team are going to be employees even though the employee will have considerable control over how his or her day is spent.

Exempt or non-exempt?

Assuming the new worker is an employee, the next question to answer is whether the position is non-exempt or exempt. Non-exempt employees are generally paid hourly and are entitled to overtime and meal and rest breaks, while exempt employees are compensated on a salary basis and are paid at a set rate regardless of the number of hours worked. The default classification under federal and state law is non-exempt status; however, there are special exemptions in place for individuals in the sales industry that may affect employment classification.

The federal Fair Labor Standards Act (FLSA) has a special exempt category for individuals involved in outside sales. To qualify for this exemption, the employee’s primary duty must be making sales (as defined in the FLSA) or obtaining orders or contracts for services or use of facilities, for which a client or customer will provide payment. Additionally, the employee must customarily and regularly work away from the employer’s place(s) of business. Because outside sales individuals are making in-person sales visits and opening new accounts within a defined territory, it can be difficult to track the specific hours worked. For that reason, these individuals can be classified as “exempt” and no overtime payment is required.

The FLSA also has a special exempt category for individuals working in a retail or service establishments who are primarily paid through commissions. To qualify for this exemption, the employee must be working in retail or a service establishment — these are businesses that are primarily involved in the direct sale of goods or services to customers, rather than in manufacturing or resale activities. State laws often expand the definition of which employers are involved in the retail or service industries, but businesses that are primarily brewing and manufacturing beer likely will not be classified as a retail or service industry.

Additionally, the employee must pass two salary tests. First, the regular rate of pay must exceed 1½ times the minimum wage for the state or locality. For example, in California, the 2015 minimum wage is $9 per hour, so 1½ times the minimum hourly wage would need to be at least $13.50 for a 40 hour work week to qualify. Second, the employee’s total compensation must be more than 50% commissions. If all three tests are met, the position can be classified as exempt and no overtime payment is required.

Before classifying a sales role as non-exempt or exempt, review your state laws and state wage orders to determine the requirements for outside sales and commissioned sales exemptions and minimum salary requirements. There can be substantial differences between federal and state laws with respect to the payment of wages and working conditions. In order to classify a position as “exempt,” both federal and state requirements must be met.

Next up we cover commissions, expenses and confidentiality (don’t tell anyone)

Pages: Page 1 Page 2
sales team needs help
Hey craft brewery owner, your sales team needs help
sales idea lightbulb
The 25 best craft beer sales and marketing ideas in 2020
Content-marketing-2
Four budget-friendly ways for breweries to do content marketing
Star Wars
Want more beer sales? Be the guide, not the hero

Reader Interactions

Comments

  1. Marilee Rutherford says

    October 17, 2015 at 5:51 pm

    Marilee Rutherford liked this on Facebook.

    Log in to Reply
  2. Tom T-Bone McDonough says

    October 16, 2015 at 5:36 pm

    Tom T-Bone McDonough liked this on Facebook.

    Log in to Reply
  3. belgianbeerday says

    October 16, 2015 at 7:06 am

    Brewery Compensation Series part 2: Paying the sales team http://t.co/qCSzR2xYdr http://t.co/rZiEvByGuD

    Log in to Reply
  4. Mike Holt says

    October 15, 2015 at 9:21 pm

    Mike Holt liked this on Facebook.

    Log in to Reply
  5. Paul Speed says

    October 15, 2015 at 9:21 pm

    Paul Speed liked this on Facebook.

    Log in to Reply
  6. Serge Lubomudrov says

    October 15, 2015 at 9:21 pm

    Serge Lubomudrov liked this on Facebook.

    Log in to Reply
  7. Artifact_Bret says

    October 15, 2015 at 6:50 pm

    RT @crsimp01: Brewery Compensation Series part 2: Paying the sales team http://t.co/XSCoZfMsRO via @craftbrewingbiz

    Log in to Reply
  8. Todd Parker says

    October 15, 2015 at 5:21 pm

    Todd Parker liked this on Facebook.

    Log in to Reply
  9. crsimp01 says

    October 15, 2015 at 4:01 pm

    Brewery Compensation Series part 2: Paying the sales team http://t.co/XSCoZfMsRO via @craftbrewingbiz

    Log in to Reply
  10. Ernest Martinez says

    October 15, 2015 at 1:22 pm

    Ernest Martinez liked this on Facebook.

    Log in to Reply
  11. Adrian Moser says

    October 15, 2015 at 1:22 pm

    Adrian Moser liked this on Facebook.

    Log in to Reply
  12. Kelli O'Brien says

    October 15, 2015 at 1:22 pm

    Kelli O’Brien liked this on Facebook.

    Log in to Reply
  13. Keith Allen says

    October 15, 2015 at 12:36 pm

    Keith Allen liked this on Facebook.

    Log in to Reply
  14. Keith Allen says

    October 15, 2015 at 12:23 pm

    Adrian Moser Anthony Pantuso

    Log in to Reply
  15. CraftBeerAttny says

    October 15, 2015 at 12:16 pm

    RT @CraftBrewingBiz: Brewery Compensation Series part 2: Paying the sales team http://t.co/Q6MiUFh2Qr Great insight from @CraftBeerAttny

    Log in to Reply

Leave a Reply Cancel reply

You must be logged in to post a comment.

Primary Sidebar

Latest News

  • Boston’s Dorchester Brewing and Yakima Chief Hops team up to offer contract breweries discounts on hops
  • Montucky Cold Snacks offers hilarious prizes to winner of Mascot Contest
  • Root Shoot Malting, Blue Ox Malthouse highlight Malt Cup Award winners
  • 805 Beer debuts trailer for documentary “Inverted Perspective,” focused on freestyle motocross champion Vicki Golden

Sign up for our newsletter

unsubscribe from list

Most Popular Today

Recent Features

  • Boston’s Dorchester Brewing and Yakima Chief Hops team up to offer contract breweries discounts on hops
    March 28, 2023
  • 10 craft beer variety packs that have us excited to try new beer
    March 27, 2023
  • Take a look at Jack’s Abby’s renovated Beer Hall and its sweet new Tradition Meets Tech pilot system
    March 27, 2023
  • CCBA California Craft Beer SummitState of California Craft Beer: Covid recovery challenged by competition, consolidation
    March 23, 2023
  • Koga-brothers-karben4Karben4 Brewing to relaunch Ale Asylum brand
    March 20, 2023
  • 4 steps to understanding the filtration process in craft beer
    March 20, 2023

Footer

  • Email Newsletter Sign Up
  • About Craft Brewing Business
  • Contact Us
  • Advertise on Craft Brewing Business
  • Media Kit Download
  • Privacy and Terms

© 2023 · CBB Media LLC