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Can Salaried Employees Earn Overtime?

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Did you know that salaried employees may be eligible for overtime pay? According to employment laws, salaried employees who meet certain criteria are entitled to overtime pay. However, many employers are not aware of these laws and do not pay their salaried employees overtime.

In this article, we will explain the rules and regulations surrounding overtime pay for salaried employees. Plus, how to determine if your employees are eligible for overtime pay.

What is a Salaried Employee?

A salaried employee is an employee who’s paid a fixed salary for their work, regardless of the number of hours worked. Salaried employees are different from hourly employees in that they are not paid by the hour. Hourly employees get paid for each hour worked, while salaried employees are paid a fixed amount each pay period.

Can Salaried Employees Earn Overtime?

The Fair Labor Standards Act (FLSA) is a federal law that establishes standards for employees. It covers employees in the private sector and in federal, state, and local governments. These standards include minimum wage, overtime pay, record keeping, and child labor.

The FLSA divides employees into two categories: exempt and non-exempt. Exempt employees are not eligible for overtime pay, while non-exempt employees are eligible for overtime pay.

Exempt employees include:

  • Executive
  • Administrative
  • Professional employees
  • Outside sales employees

Non-exempt employees include most hourly employees and some salaried employees.

To determine if a salaried employee is exempt or non-exempt, you must look at their job duties and salary. If the employee’s job duties meet certain criteria and they are paid a salary of at least $684 per week, they are exempt from overtime pay.

How to Pay Salaried Employees Overtime

There are several methods for paying overtime to salaried employees. This includes time-and-a-half, double time, and a fixed bonus.

Time-and-a-half is the most common method for paying overtime and is calculated by multiplying the employee’s hourly rate by 1.5. Double time is calculated by multiplying the employee’s hourly rate by 2. A fixed bonus is a set amount of money that’s paid to the employee in addition to their regular salary.

The best method for paying overtime will depend on your company’s policies and the employee’s job duties. It is important to choose a method that is fair and consistent for all employees.

Common Misconceptions about Salaried Employees and Overtime

Despite the clear guidelines provided by the FLSA, there are some common misconceptions about salaried employees and overtime.

One such misconception is that salaried employees are always exempt from overtime pay, regardless of their job duties. Another misconception is that salaried employees can’t receive overtime pay because they’re not paid by the hour.

It’s important for employers to understand that the FLSA guidelines apply to all employees. This is whether they’re salaried or hourly. Employers should also be aware that state laws may have additional requirements for overtime pay, and it is their responsibility to ensure compliance with all applicable laws.

Let the Professionals Help With Your Payroll

It’s important for employers to understand the pay laws surrounding salaried employees. By complying with these laws, employers can avoid expensive disputes and employment tribunal claims. If you need help with your payroll, please don’t hesitate to contact us.

Picture of Christina Hageny

Christina Hageny

President - Valor Payroll Solutions

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