Can salaried employees get overtime? (as per the FLSA)

Updated on August 23, 2023
Can salary employees get overtime

With the U.S. Department of Labor indicating its intentions to release a proposal for a new overtime rule, a lot of employers and employees are left wondering how this will impact them and whether the current law will change.

While the proposal is yet to come, we decided to take a look at the overtime laws for salaried employees.

According to the Fair Labor Standards Act (FLSA), non-exempt salaried employees are entitled to overtime pay when they work more than 40 hours in a workweek. The overtime pay rate is calculated at 1.5 times their regular rate for all hours worked.

Let's dive in and learn more about when and how salaried employees get overtime pay.

Which salaried employees are eligible for overtime?

Which salaried employees get overtime

A salary-based pay is when employees have fixed compensations, or salaries, that they receive at the end of each pay period regardless of how much work they do.

How can we determine if a salaried employee is eligible for overtime?

The Fair Labor Standards Act (FLSA) outlines the criteria for overtime eligibility. While certain professions are categorized as exempt and are typically ineligible for overtime pay, there are exceptions based on salary and job duties.

So, even if they work for more than 40 hours in a workweek, these employees might not be entitled to overtime.

However, there are situations when salaried employees are eligible for overtime. In the cases when an employee’s salary doesn’t match the standard salary level of $684 per week, then that employee is automatically considered non-exempt.

All non-exempt salaried employees are entitled to overtime wages.

Under what conditions might exempt employees receive overtime?

Exempt employees are not eligible for overtime pay. The FLSA exempts the following groups of employees from overtime laws: executive employees, administrative employees, professional employees, computer-related categories, outside sales employees, and highly compensated employees.

It’s important to note that a professional occupation doesn’t define whether an employee qualifies for exemption.

Individuals should meet certain criteria regarding their job duties and be paid at least $684 on a weekly salary basis to be qualified for exemption.

Additionally, overtime requirements vary from state to state. Employees who qualify for overtime under state and federal laws receive overtime according to the higher standard, meaning that they receive the pay that benefits them the most.

Why might some salaried employees not receive overtime?

Some salaried employees don’t receive overtime pay because most of the time they are considered exempt.

The white-collar exemption means that certain employees aren’t entitled to minimum wage overtime pay and recordkeeping required by the law. They are paid compensation, or a salary, rather than an hourly wage.

There are certain tests that have to be met in order to be considered exempt:

  1. Salary basis test – the employee's salary is fixed and predetermined, and the job implies various tasks and duties that if reduced, won’t influence the pay;
  2. Salary level test – the amount of the salary should match the minimum requirements;
  3. Duties test – the employee must be primarily occupied in executive, administrative, or professional duties.

When do exempt employees get overtime?

The FLSA provides guidelines on overtime for salaried employees. Notably, even if employees fall under typically exempt job categories, they are considered non-exempt if they earn less than $684 per week or $35,568 annually.

This means that even if they are salaried, you can still qualify for overtime pay.

In general, non-exempt employees are entitled to overtime pay. Employees whose job duties meet all of the exemption criteria set by the Department of Labor don’t get overtime.

However, there are exceptions, and some employees are eligible for overtime pay despite being exempt.

How does salary work with overtime?

How does salary work with overtime

We already established that some salaried employees are considered exempt and don’t qualify for overtime unless their salary is lower than $684 per week.

So, how does overtime pay work for salaried employees who are non-exempt?

Generally, the overtime pay must be one and a half times higher than the employee’s regular rate.

The regular rate is determined by the total amount one receives in a workweek and the number of hours they are required to work under the employment agreement.

Let’s take a look at a potential scenario. We have an employee who was hired for 45 hours per week at a weekly salary of $450.

In this case, we need to calculate a regular rate to figure out the overtime pay for this employee.

To do that, we divide the $450 pay by 45 hours, resulting in a $10 per hour regular rate. The employee’s overtime rate is then calculated as a $10 straight rate plus $5 extra hourly pay equaling $15 per hour (1½ times the regular rate of pay).

What if a salaried employee works less than 40 hours?

Unlike hourly employees, salaried employees don’t receive hourly wages.

They are paid the same amount from paycheck to paycheck regardless of the hours they work throughout a workweek.

Because of that, salaried employees don’t need to detail their work hours. They tend to have a greater sense of autonomy when it comes to setting their own hours.

As a result, it often means that their workweek might not include 40 hours. Even if salaried employees work more or less than 40 hours a week, it won’t reflect on their regular pay.

Additionally, the number of hours in a workweek doesn’t determine whether an employee is qualified for overtime pay - the salary basis, the salary level, and the duties are the determinant factors for that.

How much overtime can a salaried employee work?

There is no cap on overtime that a salaried employee can work. A regular workweek for a salaried employee consists of 40 to 50 hours.

Usually, those extra hours don’t count as overtime unless an employee is considered non-exempt.

The work hours for salaried employees are directly related to their workload.

If a job requires more than 50 hours a week, then perhaps the role should be redesigned so that the workload is equally distributed between employees who are qualified for the tasks.

Can a salaried employee be forced to work overtime?

Nowadays, it’s not uncommon to work overtime. Sadly, it’s even considered a norm. But, is it legal to make salaried employees work overtime?

Under the FLSA, employers have a right to terminate a contract with an employee who refuses to work overtime, regardless of the type of pay the employee receives (ie. a salary or an hourly wage).

In fact, the maximum number of hours an employer might require of their employees isn't capped.

If your employer finds it necessary, they might require you to work overtime. Nevertheless, it doesn't mean employers should abuse it, otherwise, they might find themselves having trouble retaining workers.

Additionally, salaried employees can refuse to work overtime, unless the terms and conditions of their employment agreement state otherwise.

Frequently asked questions about overtime pay

How often are the FLSA overtime regulations reviewed or updated?

The FLSA regulations are reviewed periodically, but there's no fixed schedule for updates.

Are there specific industries or sectors where overtime rules for salaried employees differ significantly?

Yes, sectors like agriculture, healthcare, and public service often have distinct overtime rules.

What are the penalties for employers who don't comply with the overtime laws?

Employers can face fines, back pay for employees, and potential legal action for non-compliance.

How can an employee determine if they've been wrongly classified as exempt when they should be non-exempt?

Employees can review FLSA criteria, consult HR, or seek legal advice to verify their classification.

Written by:
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Alex has been an office worker for more than 10 years. He is dedicated to helping other office workers to achieve the perfect life-work balance through well-being, effective communication, and building productive habits.

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