Commission-only pay is often lawful for door-to-door reps, because the federal outside sales exemption has no salary or minimum wage requirement. The 1099 part is where companies get into trouble. A rep who sells your service, at your prices, in territory you assign, after your training, is usually your employee under the IRS and state tests. Florida, Nevada and Utah also pull pest sales reps into their licensing systems.
Those are two separate questions: can you pay reps only on commission, and can you pay them on a 1099? The first is often yes. The second is usually no.
Why commission-only pay can work for door-to-door reps
The Fair Labor Standards Act (FLSA) requires minimum wage and overtime for most employees, but it exempts outside salespeople from both. The outside sales exemption has two requirements: the employee’s primary duty is making sales, and the employee is customarily and regularly engaged away from the employer’s place of business. For door-to-door selling, DOL says the sale happens at the customer’s home, which is exactly where you want your reps.
There is no salary test for this exemption (DOL salary levels). A W-2 rep who qualifies can be paid 100% commission, with weeks of $0 and weeks of $4,000, and federal law has no minimum wage or overtime claim to make.
Utah lines up with this. The Utah Minimum Wage Act does not apply to “an outside sales person” (Utah Code 34-40-104(1)(b), the current version, in effect since May 3, 2023), and Utah has no state overtime rule beyond the FLSA (US DOL state table).
Where the outside sales exemption breaks down
The exemption follows the job, not the title. It fails when the rep’s primary duty stops being face-to-face selling away from your locations. Watch for these:
- Phone and text selling from a fixed site. DOL treats any fixed site used as a headquarters, “whether home or office,” as one of the employer’s places of business. Sales by phone, mail or internet do not count as outside sales unless they are only an adjunct to in-person calls.
- Team leads and managers whose real job is recruiting, training and running the office rather than knocking.
- Reps who also service accounts, doing initial treatments or inspections, until selling is no longer the main duty.
A rep who loses the exemption is non-exempt, and commission-only pay then has to clear the minimum wage for every hour worked in each workweek (DOL FLSA FAQ), plus overtime after 40 hours.
An example with made-up numbers. Say a non-exempt rep works 70 hours in their first week, mostly setting appointments by phone from the company apartment, and closes nothing. You owe at least 70 hours at the federal $7.25, or $507.50, plus an extra half of $7.25 ($3.625) for each of the 30 overtime hours, another $108.75. That is $616.25 for a week in which the rep sold nothing.
Why the 1099 is the hard part
Classification is a separate test from the exemption, and the facts of a typical summer sales program point toward employment. The IRS looks at behavioral control, financial control and the relationship (Publication 15-A). Ask these questions about your own program:
- Do you set the prices and the contract terms?
- Do you assign the territory and provide the leads?
- Do reps attend required training and use your pitch?
- Do they sell only for you, under a non-compete?
- Does a manager set the hours the team knocks?
Each yes points to an employee. DOL’s economic reality factors add one more problem: selling your service is integral to your business (FAB 2025-1).
Utah presumes employment for unemployment insurance. A 1099 rep must be independently established in their own business and free from your control or direction (Utah DWS). States with an ABC test are harder still. California, Massachusetts and New Jersey apply one to wage law, and its middle prong asks whether the work is outside your usual course of business. Selling pest control is your usual course of business.
Some owners point to the federal “direct seller” rule. Under 26 U.S.C. 3508, a direct seller is not treated as an employee for federal tax purposes if pay is tied to sales rather than hours and a written contract says so (IRS: statutory nonemployees). The statute covers selling “consumer products” in the home and does not say whether a pest control service agreement is one. It also reaches only federal tax, not state unemployment, wage or licensing rules. Get written advice before building a program on it.
If a rep would qualify for the outside sales exemption as an employee, the federal minimum wage and overtime exposure from a 1099 is limited. The exposure is everything else, mainly employment taxes and state unemployment contributions. If the rep would not qualify, back minimum wage and overtime come with it.
State licensing that treats reps as yours
Utah. Under a statute in effect since May 6, 2026, an individual must hold a salesperson permit from the Department of Agriculture and Food before soliciting anyone to agree to a pesticide application. The salesperson must complete an approved video training each calendar year and be employed by a registered pesticide applicator business, and the permit expires each December 31 (Utah Code 4-14-112(2)). A business whose salesperson has no permit or skips the training is itself in violation (4-14-111(6)). UDAF’s salesperson permit page has the application.
Florida. Anyone who performs pest control for a licensee needs an identification card, and Florida counts soliciting pest control work as pest control (s. 482.021). A cardholder must be an employee of the licensee, not an independent contractor (s. 482.091). A 1099 rep knocking for a Florida company conflicts directly with the statute, and the license is what is at risk (s. 482.161).
Nevada. An “agent,” meaning anyone who solicits business for a license holder, is one of the pest control license types, tied to the business license holder (NRS 555.261 and 555.280). For wage law, Nevada presumes a contractor only when strict conditions are met, including an EIN or a filing history, required licenses and insurance, and three of five independence criteria (NRS 608.0155).
California. A Structural Pest Control Board Field Representative license is needed to secure work, inspect and bid for a registered company (SPCB).
If your crews travel for the summer, check the licensing and solicitation rules in each state and city they knock, as well as where your office is.
Housing, advances, deductions and final pay
Summer programs often provide an apartment and advance money early in the season, then take both back out of commissions. Both deductions have limits.
For a rep who is not exempt, deductions for items that mainly benefit the employer cannot take pay below the minimum wage or cut into overtime, and having the rep pay you back in cash does not avoid the rule (DOL Fact Sheet #16). Lodging can count toward wages only where it is customarily furnished, and only at its reasonable cost, which is no more than your actual cost and includes no profit (29 CFR 531.3, 531.31).
For an exempt rep, the federal minimum wage limit does not apply, but state deduction rules still do. In Utah, the Labor Commission says most deductions from wages need the employee’s signature under Utah Administrative Code R610-3-18 (Utah Labor Commission). New York requires a written commission agreement signed by both sides and kept for at least 3 years (Labor Law s. 191).
Final pay in Utah: if you separate a rep, unpaid wages are due within 24 hours; if a rep without a fixed-term contract quits, they are due on the next regular payday. The commission portion can wait where the amount is known only after an audit or verification of sales, for a sales agent who has custody of the company’s accounts, money or goods (Utah Code 34-28-5).
Put the rent, the advance, how each is repaid, and what happens to both if a rep leaves in July into one signed document before the season starts.
What to do before next season
- Decide who is W-2. For most programs, that is every rep, with the outside sales exemption doing the work commission-only pay needs.
- Write down each role’s actual duties. Knocking reps, phone setters and team leads are different jobs with different overtime answers.
- Track hours for anyone whose exemption is doubtful.
- Get a written commission plan signed: rates, when a sale counts, chargebacks for cancellations, and the terms for housing and advances.
- Check licensing in every state on the summer map, starting with Utah, Florida and Nevada. In Utah, get each rep’s salesperson permit and annual training done before they knock.
SimplyHR writes seasonal and sales-crew policy separately from the service side, because housing, travel, recruiting practice and pay for door-to-door crews are a separate compliance problem. A 1099 and employee classification audit is part of the Foundation retainer. If you run a summer program, the free 12-question HR diagnostic is a good first look, or book a call and bring your rep agreement. For the technician side, see whether techs can be 1099.