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Do Salaried Employees Get Overtime?

Book with title overtime labor law.

Breaking down a common misconception about wage & hour law

"You're salaried, so you don't get overtime."

We hear this statement, or variations on it, all the time, and it stems from a misunderstanding of how wage and hour laws work. When people use the term "salaried" this way, they really mean "exempt" — and "exempt" is a legal term with a specific legal definition. Only certain workers are considered exempt and thus don't get overtime. Just because your employer says you're one of them does not make it so.

Being "on salary" is just a method of paying you, as opposed to being hourly, day-rate, or piece-rate. Exempt employees usually have to be paid on salary, but not all salaried employees are exempt. You need to understand this distinction to protect your legal rights.

Who can and cannot be exempt is based on job duties

Not every employee can be classified as exempt; indeed, most employees cannot. In addition to the minimum salary requirement (currently $684 per week, as set by the Department of Labor), only particular jobs as defined by law can be treated as exempt. The most common exemption, which exists in basically any organization, is for managers who have hiring, firing, and evaluation power or comparable decision-making authority.

The key issue here is that the exemption is based on job duties, not job title. Your employer can call you a supervisor, manager, director, or even vice president, but if you are not a bona fide manager with hiring, firing, and evaluation power, you're not exempt. This happens too often to "assistant managers" in industries such as retail, hospitality, food service, and banking, for example. You may have a few extra responsibilities or act as a "shift leader" when your boss isn't around, but if you spend most of your day helping customers and performing ordinary work tasks instead of managerial tasks, you're not exempt.

Certain non-management jobs are also eligible to be exempt, including learned professionals (e.g., doctors, lawyers, engineers), administrative professionals, and outside salespeople who physically go out and meet with customers. There are also certain other jobs that are specifically exempted by statute. Again, this exemption is based on job duties, not job title.

Remember, if you are exempt, the exemption cuts both ways

It's not enough for your job duties and salary to qualify as exempt. Your employer has to actually treat you as an exempt employee, which means paying you the same amount for every week you work, regardless of hours. This means you don't get overtime if you work 50 hours in a given week, but it also means you aren't docked pay if you work 30 hours the next week. Your employer can make you use paid time off (PTO) during such weeks, but they can't pay you less than your usual weekly wage.

Employers are only allowed to deduct pay from exempt employees in specific circumstances, including the first and last week of employment and weeks when you take unpaid FMLA leave. If your employer makes improper deductions from your salary, then they can lose the exemption — meaning they have to start paying you overtime.

Talk to an experienced wage & hour attorney about your rights

Misclassifying an employee as exempt is an incredibly pernicious violation of wage and hour laws. Often, it's framed as a step up for you — a chance for you to take on more responsibility and grow your career — when in fact it's an excuse for your employer to steal money out of your pocket. That's why misclassified workers have legal recourse.

Depending on the circumstances, you may be eligible to file an individual claim or a class-action lawsuit if your employer has a pattern of misclassifying many employees as exempt. Either way, it starts with a free, confidential consultation with an experienced attorney. We would be honored to listen to your story and explain your legal options. No cost, no obligation, just answers. We can help.

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