Being Salaried Does Not Mean You Are Exempt from Receiving Overtime
Hourly workers (except teachers, lawyers, and doctors) are by definition “nonexempt” and therefore entitled to overtime pay. However, even if you are a paid a salary, you may still be entitled to overtime pay.
To be exempt from receiving overtime you would need to:
- Receive a salary of at least $455 per week, and
- Perform the duties of an exempt employee.
Are You Really Salaried?
- Being salaried means you get paid the same amount for each pay period, even if you only worked 35, 25, or even 10 hours.
- However, the salary has to be a guaranteed amount. If your employer can reduce your pay based on the quality or quantity of your work, or for other special situation, then the employer has destroyed your status as being salaried. Be sure to check your employer’s employment policies — and your paystubs — for possible reductions.
- Remember: it does not matter if your employment contract or paystub reflects a “salary” or even an “hourly” rate.
What Are the Duties of an Exempt Employee?
There are three main categories of exempt job duties: professional, executive, and administrative. Labels or titles do not matter. If your job duties fall into any of these three categories, you may be an exempt employee.
- Administrative Job Duties
- Exempt administrative job duties are the most difficult to classify.
- Administrative workers are exempt when their primary duties are:
- To perform non-manual or office work directly related to the management or general business operations of the employer or its customers; and
- To exercise independent judgment and discretion on important matters.
- Some examples of administrative duties are those related to functional areas of the company’s operations, including tax, finance, accounting, budgeting, auditing, insurance, quality control, purchasing, procurement, advertising, marketing, research, safety and health, human resources, public relations, government relations, computer network, Internet and database administration, and legal and regulatory compliance.
- Exempt administrative employees do not include those who produce or sell the company’s “product,” but you could still be considered administrative if your job is to be an advisor or consultant to customers on administrative matters.
- Performing administrative duties is not enough. To be exempt duties, they must be performed with a high level of judgment and discretion in order to qualify as exempt, including dealing with overall company policies or operations, being able to define or deviate from policies, and having authority to commit the company in significant financial matters
- Even if you perform administrative tasks, or your decisions could result in financial loss to the company, you may nonexempt.
- Contact us to see if you were misclassified as an exempt administrative employee.
- Executive Job Duties
- Exempt executives are those who:
- Have authority to make, or whose recommendations carry special weight in making hiring, firing, or job status decisions; and
- Regularly supervise two or more full-time employees (or the equivalent in part-time employees); and
- Manage or are in charge of an organizational unit or shift when on duty.
- Don’t be mislead: even if you have a fancy job title, are called a “manager,” or are considered “the boss,” you can still be nonexempt and qualify for overtime.
- Contact us to see if you have been misclassified as an exempt executive employee.
- Professional Job Duties
- Includes most of the traditionally recognized “learned professions”: lawyers, doctors, teachers, accountants, and engineers.
- Generally, exempt professionals are those who apply judgment and discretion in their work after acquiring specialized training, education, or credentials.
- The FLSA also includes as exempt professionals certain computer-related jobs, including programmers, systems analysts, and systems engineers.
- Even if you have a specialized degree or credential, you have to actually practice in that profession to be considered exempt: computer professionals working in tech support or installation, or CPAs who only do bookkeeping, are not performing exempt duties.