Did You Know That Certain Salaried Employees Are Entitled To Overtime Pay?

An Overview of the Three Criteria All Salaried Employees Should Review

Many of us believe that if we are paid a salary we are not entitled to overtime pay.   But the truth of the matter is that being paid a salary does not determine your rights to overtime pay under the law. In fact, many employees are being cheated out of pay owed to them, simply because their employer told them they are salaried employees and “therefore not entitled to overtime pay.”  Unfortunately, employers often misclassify their employees as exempt from overtime and deprive employees from these hard earned overtime wages.

A vocabulary lesson:  Employees that are classified “exempt” are not entitled to overtime wages.  Employees’ classified “non-exempt” must be paid overtime wages for any time that exceeds 40 hours in a work week.  For the purpose of this discussion, just consider that exempt employees are considered ineligible for overtime pay.  But, employers frequently intentionally or unintentionally misclassify their employees as exempt – which can illegally deprive them of overtime pay.

So how do you know if your job should be classified exempt or non-exempt under the law? The Fair Labor Standards Act, which is the Federal law that governs fair pay, outlines 3 tests we can use to help us determine whether an employee is exempt or non-exempt under the law:

  • The Salary Test – The employee must be compensated on a salary basis at a rate at least $455.00 per week to be considered exempt from overtime.  The employee is paid on a salary basis if he/she can count on receiving a “guaranteed minimum” amount of money for any week he/she performs work.  Employees who earn less than $455 per week should be paid overtime wages.
  • The Duties Test – Job titles do not determine exempt status.  Banks typically have Assistant Managers in hundreds or thousands of their branches, an example of a title that can have little meaning.  However, it is the actual job tasks an employee must complete and how the job fits into the employer’s overall operations which determine whether an employee is entitled to overtime pay.  Thus, many employers assign a salaried employee a “glorified” title in order to make their employees think that they are not due overtime pay. Title is just one aspect of the Duties Test, but it is included since it is such a common misconception that the title of “manager” automatically entitles an employer to pay their employees a salary only for all of their work.
  • The Exemption Test – the employee does not fall under one of the exemptions for overtime under the Fair Labor Standards Act.  (Professional Exemption, Administrative Exemption, Outside Sales Exemption, Executive Exemption, Computer Employee Exemption, Highly Compensated Employees Exemption.) http://www.dol.gov/whd/regs/compliance/fairpay/fs17a_overview.pdf

Determining the difference between exempt and non-exempt can be confusing and often takes an experienced employment attorney to analyze the law and the employee’s specific job duties, to determine whether the employee should be compensated for overtime wages.

So remember that being paid a salary in itself does not necessarily mean you are not entitled to overtime pay.  If you feel that your employer may have misclassified you as exempt from overtime pay please contact the Shavitz Law Group for a free consultation at www.shavitlaw.com or 888-941-9111 or email us at [email protected].

You Earned It,
Now Let's Go Get It.

Contact us to learn more about your right to overtime, fair pay, and equal treatment in the workplace.

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