There are millions of workers in the United States who are entitled to overtime pay if they work more than 40 hours during the workweek. However, there is a big question as to whether salaried workers get overtime. The truth is that many of these employees are not entitled to overtime pay according to federal regulations.
However, due to a change in federal law, salaried workers may be able to earn overtime. You must know exactly what the rule is so that you can get paid, or else your employer will end up not paying you.
Which salaried workers are eligible for overtime?
Many people think that in order to receive overtime pay, you must have an hourly rate at work. But this is not the case, because many salaried employees are entitled to overtime.
The exemptions for workers to not be eligible for overtime pay will only apply to a very small group of employees. However, many employers take advantage of misconceptions in order to deny their employees the money they have earned.
Employees for whom overtime pay may apply
The Federal Department of Labor’s rule dictates that salaried employees earning less than $684 per week are normally eligible for overtime. This means that if you have a salary of $35,500 per year or less before taxes, you could apply for overtime pay.
Exemptions will apply to corporate executives, administrative employees, professional workers, computer or software workers, and outside sales workers. Eligibility will depend on whether you meet different criteria of various tests as set forth in the law.
However, there are many employers who typically do not offer overtime to any salaried worker regardless of whether they are on the exemptions or not. This action may be due to a misunderstanding of the overtime wage law. In these cases, it may be necessary for you to hire a labor attorney to identify whether you qualify for overtime.
How much is overtime pay?
You should consider that overtime pay will be at a rate of 1.5 times the standard hourly rate. This means that, if you earn $20 in a standard work hour, overtime would have to be paid at $30. This payment applies to all hours in excess of the 40-hour workweek that is normally the workweek.
However, compensation is not based solely on the average hourly wage. Also according to the Department of Labor, employees may use performance-based bonuses and incentive payments to pay up to 10% of the employee’s standard wage. In these cases, the payment will not necessarily be for overtime in a given workweek.
Can I refuse to work overtime?
Normally, employers may terminate any employee who refuses to work overtime. This includes salaried employees, but if they are exempt from overtime pay, no matter how much you work you will not be paid more.
For this reason, employees should ideally not be forced to work more than 40 hours. This is because companies could face a serious employee retention problem.
However, if you do not qualify for an exemption, your employer can make you work overtime, but you will be entitled to overtime pay. In the event that you do not receive any pay for your work, you will need to consult with an attorney.
Criteria for workers to be considered exempt from payment
Employees who are considered exempt from overtime pay must meet three specific conditions:
- Employees are paid a fixed salary and do not have an hourly rate that fluctuates depending on the schedule.
- The established exemption threshold is reached. This threshold is not the same in all states, because some have established their own thresholds that are higher.
- Primary duties must include executive, administrative, or professional work. If you perform manual or physical labor, you may be eligible for overtime pay even if you have a good salary.
For this reason, if you do not know if you are eligible for overtime compensation, it is best to consult with a professional. This way, you will know if you are entitled to this type of compensation.
Companies that are exempt from paying overtime
It should be considered that the FLSA does not cover all full-time employees, and there are companies that are exempt from making this payment such as:
- Those that do not sell across state borders.
- Those that do not handle, sell, or work with goods or materials that they will sell across state borders.
- Companies earning less than $500,000 per year in the business.
However, some businesses regardless of their activity will always have to comply with FLSA regulations. These include hospitals, health care providers, schools, and government agencies. It is estimated that more than 143 million Americans are protected by the FLSA.
What are the state exceptions?
Each state has its own rules regarding overtime pay for salaried workers. In Alaska, California, and Nevada, employees are entitled to overtime pay if they work more than 8 hours in a single day.
California workers will earn overtime if they work 12 hours or more in a single day. For Colorado workers, they will not necessarily receive overtime pay if they work more than eight hours a day or if they do not work more than 40 hours a week. But they will have to be paid time and a half if they work more than 12 hours in a single day.
Oregon has special rules for manufacturing workers, who will be paid overtime after working 10 hours a day.
It should be noted that state laws that are less stringent than the FLSA will not apply to most public and private employees. In addition, labor laws prohibit persons under the age of 18 from performing certain jobs, restricting the number of hours and times they may work.
- Overtime pay (n.d.). DOL. https://www.dol.gov/general/topic/wages/overtimepay
- What if a salaried employee works more than 40 hours? (2019, March 21). Small Business – Chron.com. https://smallbusiness.chron.com/salaried-employee-works-40-hours18787.html.
- Sethi, N. (2022). When are salaried employees eligible for overtime pay? Employment and Consumer Law Group. https://eclaw.com/tennessee-employment-lawyer/when-aresalaried-employees-eligible-for-overtime-pay/