Most everyone knows that workers who are compensated hourly look forward to working more than 40 hours in a week. When that happens, these hourly workers receive “time-and-a-half” their regular rate of pay for all hours over 40. Conversely, many people believe that salaried workers can only receive the same flat rate of pay each pay period, regardless of the total amount of time actually worked.
This is actually a common misconception. Just because you are a salaried worker does not mean that you are automatically ineligible for overtime. To be truly ineligible for overtime compensation, you need to be classified as an “exempt” employee.
Exempt vs. Non-Exempt Employees
The key to determining whether or not you should be getting overtime lies with your classification as an exempt or non-exempt employee. A non-exempt employee is not exempt from labor laws — in this case, the Fair Labor Standards Act (FLSA). If you are non-exempt, you enjoy the protections of the FLSA, including the overtime rule.
It is generally up to employers to meet the standards for classifying their employees as exempt from the overtime rule. For starters, a salaried employee must earn at least $684 per week ($35,568 per year) in order to meet the salary threshold for being exempt. The other conditions that must be satisfied for an employee to be considered exempt depend on the type of exemption being claimed by the employer.
Executive, Administrative, and Professional Exemptions
These three exemptions are the most commonly used by employers. Each one has slightly different conditions that must be met in addition to the salary threshold ($684 per week):
- Executive exemption: An executive employee must have certain responsibilities and authority within the enterprise. For instance, the executive employee must manage the business or a division within the business, “customarily and regularly” manage two or more full-time employees, and have the power to hire and fire employees.
- Administrative exemption: An employee using the administration exemption must perform non-manual work related to the management or general business operations of the employer. Additionally, the administrative employee must be able to exercise independent judgment and discretion to “matters of significance.”
- Professional exemption: For this exemption, employees must generally have job duties that require advanced knowledge in a field of science or learning and consistent judgment and discretion. The FLSA also requires the advanced knowledge to be acquired from a “specialized intellectual institution.”
These three exemptions are not the only ones offered by the FLSA. Exemptions also exist for computer and outside-sales employees. Individual states often have exemptions that supplement federal exemptions.
Conclusion
No matter if you are compensated by the hour or through a regular salary, your employer must show that you meet all of the conditions of a recognized exemption for you to be exempt from overtime pay. It is not uncommon for employers to try to save money by misclassifying employees as exempt when, in reality, they should be classified as non-exempt. If you suspect this is happening to you, we want to help you get what you deserve. Our firm offers free consultations to prospective clients; get in touch with us here to see whether or not you have a valid overtime claim.
Carla D. Aikens, P.L.C.
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