Am I entitled to overtime as a salaried employee?

Even if you earn a salary, you may still be entitled to overtime!

Many people confuse the difference between a salaried employee and an employee who is exempt from overtime under the Fair Labor Standards Act (FLSA). Under the FLSA, any employee who is not specifically exempt under the FLSA or another federal law is eligible to receive at least time-and-a-half pay for all hours worked over 40 in a given week.

Salaried vs. hourly is not the only issue

While being salaried can be a factor, it is not the only criteria for determining whether an employee is exempt from overtime. There are exceptions, but generally, whether employees are exempt is determined based upon:

• How much they are paid
• How they are paid (hours worked vs. annual salary divided by pay period)
• The specific job duties they perform

There is an exemption for professional, administrative, executive and computer employees, as well as outside sales employees and highly compensated employees. Each of these exemptions is highly dependent on the job duties each employee performs, regardless of job title. In addition, specific positions are also exempt from FLSA overtime rules, including seasonal farm workers, police officers and others.

Examine job duties to determine status

Unfortunately, it can be difficult to determine whether an employee is exempt or nonexempt. Employers may need to get professional legal guidance to determine whether an employee should be classified as exempt.

Classifying an employee incorrectly can have significant negative consequences. Employees who have been classified incorrectly may be able to recover unpaid overtime for previous hours worked.

Guidelines can help

The U.S. Department of Labor has issued guidelines involving most exemptions, including the executive, administrative and professional exemptions.

To be exempt from overtime, an “executive” must:

• Manage an enterprise, department or subdivision of the business;
• Supervise two or more full-time employees or the equivalent; AND
• Make employment decisions, including the hiring and termination of employees.

To be exempt from overtime, an “administrative employee” must:

• Perform office work related to business operations or management; AND
• Exercise discretion and independent judgment on matters of significance to the business.

To be exempt from overtime, a “professional” must:

• Perform work that requires advanced knowledge in a field of science or learning and requires discretion and judgment;
• Perform work that is primarily intellectual in nature; AND
• Have ability acquired through specialized intellectual instruction, such as an advanced degree.

Exempt status under the FLSA can be a gray area of the law. Employers and employees with questions regarding exempt status should speak to an experienced employment law attorney to determine proper classification status.

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