Salaried Workers and Overtime Rights

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With a salary usually come many benefits. A salaried worker may receive paid time off, additional medical days, holidays off and other distinct advantages. This position is often associated with a position higher in the company. However, there can be some drawbacks to being a salaried worker. In some situations, employers give this status to employees in order to avoid paying more money for overtime benefits. However, doing so can be a violation of the Fair Labor Standards Act.

Fair Labor Standards Act

The Fair Labor Standards Act requires most employers to pay employees 1.5 times their normal rate if they work more than 40 hours a week. There are a few exceptions to this rule. However, salaried employees are still entitled to overtime pay unless they actually meet the definition of being exempt. While some employers may think that they can free themselves from the obligations of the Fair Labor Standards Act by stating that an employee is “exempt,” this is not the case. Similarly, calling an employee “salaried,” “executive” or “administrative” does not remove the employer’s obligation to pay employees in accordance with the Fair Labor Standards Act.

Exempt Status

In order for an employee to be considered exempt, he or she must work in a job that is considered exempt, such as outside sales or airline work. The general standard for most individuals is whether they are paid at least $455 per week, paid on a salary basis and performs job duties that are exempt by law.

Exempt Job Duties

Exempt job duties are usually associated with higher-level duties regarding the operations of a business. The main categories listed under the Fair Labor Standards Act include executive, professional and administrative duties. If the employee has these types of duties, he or she is likely an exempt employee.

Executive job duties include supervising two or more other employees, working primarily in a management position and having real input into making hiring and firing decisions regarding applicants and employees.

Professional job duties usually include highly specialized fields that require formal education or training, such as teachers, doctors, lawyers, registered nurses and architects. Writers, actors, journalists and musicians may also fall under this category. Professional job duties are those that require the employee to make important judgments or to use more imagination or contribution than other types of jobs.

Administrative job duties are those that help a business run. They include human resource positions, payroll, accounting and public relations. They usually extend beyond typical clerical duties and include such duties as office work that is directly related to business operations or deals with work involving customers that requires independent judgment about important business matters.

General Rule

While the job duties factor into the evaluation, the general rule is that an employee is entitled to overtime pay if he or she works over 40 hours in a given week unless he or she truly qualifies as exempt under the law.
Signs of Violations

Some indications that an employee is being misclassified include the following:

• The employee is given a title that does not match up to his or her duties. For example, the employee is called “executive,” even though he or she has no real authority.
• The employee is misclassified as an independent contractor.
• The employer often requires the employee to work more than 40 hours per week.
• The employee is asked to waive overtime or asked not to show more than 40 hours of work on his or her time card.
• The employer informs the employee that he or she is salaried and is not entitled to overtime pay.

Legal Assistance

If you believe that you are being misclassified, you may wish to consult with an employment lawyer to discuss your rights under the Fair Labor Standards Act.


Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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