Outside salespeople can be employees or independent contractors, depending on the
circumstances. Much of it depends on control. The work conditions in this field vary,
even for those salespeople who apparently are in the same category. There is no general
rule to determine whether outside commissioned salespeople are employees. Consider
Section 3508 of the Internal Revenue Code first. If the outside commission salesperson
meets all elements of that test, you do not need to consider whether the salesperson
is an employee. Certain conditions are common to most salespeople, such as:
the company fixing the sales prices and terms;
the furnishing of leads; and
requirements that the sales representatives investigate customers' complaints, collect
delinquent accounts, and refrain from selling for competitors.
However, these conditions are not sufficient to establish an employment relationship.
There must be more control factors for a salesperson to be an employee.