Can a salaried employee get overtime?

There a misconception that employees who are paid salary never have to be paid overtime.  This is NOT true!  The issue is complicated, but here’s some information for figuring out whether you are entitled to overtime, or whether you need to pay your employees overtime.

The payment of wages and issues like overtime are governed by a federal law, the Fair Labor Standards Act of 1938, known as FLSA.  FLSA governs the federal minimum wage, employment of youth, and overtime pay.

In order to qualify for overtime, you must meet certain guidelines.  The first is that you have to be a “covered” employee.  To be covered, you must either work for the right kind of employer (either a company with over $500,000 in annual sales volume or the government, a hospital, or a school), you have to be regularly involved in interstate commerce, or you have to work as a domestic service worker (nanny, housekeeper, etc.).

The second issue is that you have to be “nonexempt.”  So who is exempt and who isn’t?  This is a complicated question, because there are lots of exemptions.  The basic rule, though, is that if the employee does not fit into an exemption, he or she is entitled to overtime, regardless of whether he or she is normally paid on a salary basis or not!  The main exemptions are as follows:

  • Most employees employed in a “bona fide executive capacity”
  • Some administrative employees, whose duties include the “exercise of discretion and independent judgment with respect to matters of significance”
  • Most professional employees, include medical practitioners, teachers, creative professionals (actor, dancer, musician), and (my favorite) “learned” professionals (lawyers, scientists, architects)

If you don’t qualify for an exemption, you do qualify for overtime.  This means if you work over 40 hours in a given workweek, you are entitled to time and one-half for any hours over 40 that you worked.  Moreover, you cannot waive your right to overtime, and you cannot reach an agreement with your employer to accept a salary instead of your overtime pay.  So even if your employer hires you to work 45 hours for $450 each week, you are still entitled to receive $475 each week!

If you are an Idaho employee, contact me to talk about whether you should be getting paid overtime.  If you are an Idaho employer, contact me to talk about whether you should be paying your employees overtime.

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