The right to overtime pay can be an extremely complicated issue. There are both state and federal laws in place to defend the rights of an employee to overtime pay, but the complexity is such that each individual case must have the circumstances thoroughly examined. We will provide a broad overview of overtime pay rights, but we encourage anyone who feels they may be owed overtime pay to fill out a case evaluation form.
The simplest way to exclude someone from being owed overtime is to qualify them as exempt employees. These are employees who are not legally owed overtime pay, despite working more than 40 hours in a given week, due to their job duties, compensation and responsibilities. Here’s a quick overview of some employees who fit this description:
- Commissioned retail sales employees whose income is more than half based on commission.
- Managers or executives who earn a salary of at least $455* ($684 as of 1/1/2020) per week and have at least two employees under their supervision.
- Drivers are usually exempt if they are employed by a motor carrier engaged in interstate commerce.
Now that we’ve looked at a few examples of employees who aren’t entitled overtime pay, let’s dive into the biggest misconception regarding exemption: salaried employees. While it increases the likelihood that an employee is exempt, salaried employees could very well be owed overtime pay by law. To be exempt from the overtime laws, a salaried employee must also fall under one or more exemptions. The primary exemptions to the overtime laws are listed below:
Executive Exemption – To meet this exemption, an employee must be salaried at a rate no less than $455* ($684 as of 1/1/2020) per week. They must have the authority to hire or fire and must supervise at least two employees.
Administrative Exemption – The administrative exemption also starts with an employee being salaried at a rate no less than $455* ($684 as of 1/1/2020) per week. Primary duties must include the performance of office or-non-manual work related to management or general business operations of the employer.
Professional Exemption – Professional exemption also requires a salaried employee to be making at least $455* ($684 as of 1/1/2020) to qualify. Beyond that, the employee must have an advanced knowledge level that is intellectual in nature and fits in the learning or science field.
Computer Employee Exemption – To fit the computer employee exemption, the employee must either be salaried and make no less than $455* ($684 as of 1/1/2020) per week or compensated on an hourly basis making no less than $27.63. The employee must then be a computer programmer, computer systems analysts, software engineer or other similarly skilled worker in the computer field who has very specific duties.
Outside Sales Exemption – To meet the requirements of the outside sales exemption, the employee must be regularly engaged outside of the employer’s place of business and their primary duty must be making sales or obtaining contracts, orders, or the use of facilities.
Highly Compensated Employees – Employees who perform non-manual or office work and are paid an annual salary of $100,000 ($107,432 as of 1/1/2020) or more are exempt if they regularly perform at least one of the duties of an exempt, executive, professional, or administrative employee.
*Note: The Obama Administration increased the minimum “exempt” salary amount to $47,476 effective 12/1/16 but the increase was blocked by a court ruling. Instead, the Trump Administration only increased the minimum “exempt” salary to $35,568 per year as of 1/1/2020. Please see this page for the latest updates.
It’s important to remember that the burden of proof is on the employer when it comes to labeling an employee exempt. Overtime-FLSA prides ourselves on protecting the rights of employees every single day. If you believe you are owed more, give us a call at (713) 782-LAW1 (5291).