There is lingering myth that if you are paid a salary, as opposed to an hourly wage, you are exempt from being paid overtime. As you will see in this article, however, it isn’t so cut and dry. There are some qualifiers to consider.
You are not exempt if you earn less than $23,600 per year, hourly or salary. In other words, you can and should get paid overtime, as long as you do not have duties associated with your job that are exempt.
This could be tricky if your employer leans toward the unscrupulous side, by adding exempt duties to your work. However, it would be trickier for the employer if you and others who have been unpaid incorrectly come forward to right that wrong.
Employees paid by the hour are considered non-exempt. However, non-exempt employees can be salaried employees. That said, if a salaried, non-exempt employee actually works more than 40 hours in a week, that employee should be paid overtime the same as the hourly non-exempt employee. This assumes that both are earning less than $23,600 per year.
It is no secret that many employers take advantage of their salaried employees by expecting them to stay at work beyond 40 hours without paying them overtime. If the salaried employee is making less than $23,600 per year, then they are walking on thin ice. An informed employee in this situation can get a lawyer to enforce payment of any unpaid overtime.
Depending on your location any salary over $23,600 per year may be considered “livable”, while in other areas, it’s not. Keep in mind too that this amount is at the federal poverty line for a household of 3-4 people.
In light of these details, the question of whether salaried employees are “entitled” to overtime pay most surely will remain until if and when laws change.
Even if your employer is fair-minded and seems to treat you and others well, don’t take your rights for granted. Get to know what your rights are in any situation. Even a good employer could overlook this, so getting the overtime pay you deserve should not be a hassle.
Here are a couple of scenarios where overtime pay might be a question:
For example, if a hospital employee is on call and is required to remain on the premises for any length of time, they are essentially “on the clock” and should be paid overtime if it is over 40 hours.
A retail manager may or may not be exempt. It depends on their managerial role. If they have a direct impact on major company decisions, like hiring and firing people, then legally they are exempt.
The fact is, many managers do not have those duties, and should be considered non-exempt. But employers may try to get away with it by declaring that manager an exempt employee just because they’re salaried.
Clearly, the question of entitlement of overtime pay to salaried employees is solved in a legal sense – for now. If you have any questions about your status, get to know your rights.