Wage Issues? Tip #8: Being Paid on Salary Basis Does Not (By Itself) Exclude You From Overtime Pay

This post continues my series of tips, or things to consider, for workers with unpaid wages.

Tip #8 is this: Being Paid on Salary Basis Does Not (By Itself) Exclude You From Overtime Pay.

There is a common myth among workers that if a worker is paid on a salaried basis, then the worker is not entitled to overtime (1.5x regular pay for hours over 40 hours per week), end of story.

Please know that being paid a salary does NOT itself disqualify (“exempt”) a worker from overtime.  Paying a worker a salary is one criterion of multiple criteria that must be present for an employer to avoid overtime obligations to that worker. Thus, for any salaried worker, additional criteria must also be present before that salaried worker can be overtime-exempt under the law.

On this website, the Department of Labor describes common exemptions for overtime coverage under the federal wage law, the Fair Labor Standards Act.  The website describes the criteria (salary pay of at least $455/week PLUS other listed criteria) that must be met before an employer can legally exclude a worker from overtime pay under one of the detailed exemption types.

As you will see, the exemptions mostly depend on the job duties that the worker performs, and whether the nature of those duties (regardless of salary pay) are the type that make the worker overtime-exempt.

If you are a salaried worker who has reviewed these exemptions, you may not agree with your employer’s classification of your job as overtime-exempt.  Indeed, there are frequently lawsuits where workers and employers disagree about the employers’ application of exemptions that the workers feel are inappropriate for their jobs and duties as actually worked.

If a worker simply (and wrongly) assumes that salary pay excludes him or her from overtime pay, then the worker may be overlooking other necessary exemption criteria that are not fulfilled, and overlooking a potentially valid legal claim for unpaid overtime.

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