fbpx

Salary & Overtime FAQs

If you are paid on a salary basis, you should receive the same amount of pay for each week that you work regardless of the number of days or hours you work. In other words, if you are paid on a salary basis, and your weekly salary is $500 per week, and you work five fewer hours that week, you are still entitled to receive your usual $500 in wages.

Too often, we hear clients tell us that their employers say that if they are paid a salary, they are not entitled to receive overtime pay. However, this is not necessarily true. The way an employee is paid does not actually determine their right to overtime pay. In reality, even if you were told that you would be paid a certain salary regardless of how much you work, you could still be entitled to overtime pay.

It is an employee’s job duties that determine if they are exempt from the overtime rules. While some salaried positions may be exempt from overtime, the job position must meet specific exemption criteria for the position not to be permitted to overtime pay.

What are the Most Common Overtime Exemptions?

The three most common overtime exemptions that entitle an employee to be paid overtime if they are on a salary basis are:

Executive Exemption

To qualify for executive exemption, you must meet all of the following requirements:

  • The employee must be compensated on a salary basis at a rate of at least $684 per week.
  • The employee’s primary duty must manage the enterprise or manage a customarily recognized department or subdivision of the enterprise.
  • The employee must regularly direct the work of at least two or more other full-time employees or their equivalent.
  • The employee must have the authority to hire or fire other employees or recommend hiring, firing, advancement, promotion or any other change of status of other employees.

Administrative Exemption

To qualify for the administrative employee exemption, all of the following factors must be met:

  • The employee must be compensated on a salary or fee basis at a rate of at least $684 per week.
  • The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers.
  • The employee’s primary duty includes exercising discretion and independent judgment with respect to matters of significance.

Learned Professional Exemption

To qualify for the learned professional employee exemption, all of the following qualifications must be met:

  • The employee must be compensated on a salary or fee basis at a rate of at least $684 per week.
  • The employee’s primary duty must be the performance of predominantly intellectual work, which includes work that requires the regular exercise of discretion and judgment.
  • The employee must have advanced knowledge in a field of science or learning.
  • The employee’s advanced knowledge must be acquired by a prolonged course of specialized intellectual instruction.

If you are paid on a salary basis but do not have the job duties listed under one of these exemptions, you are likely a non-exempt salaried employee ­– permitting you to overtime pay.

How is Overtime Calculated Under Different Salary Pay Structures?

Employees who are paid a fixed salary for a workweek longer than 40 hours are still entitled to overtime pay unless their position is exempt. For example, if an employee is hired to work a 45-hour workweek for $500 per week, the regular rate is calculated as: $500/45 hours = $11.11. Since the salary is deemed to compensate the employee at straight time for all hours worked, the employee is due half-time pay for hours worked over 40: $11.11/2 x 5 = $27.77

However, in fixed salary for fluctuating hours pay structures, the regular rate of an employee varies from week to week. The regular rate is determined each week by dividing the salary by the number of hours worked and cannot be less than the applicable minimum wage in any week. Since straight-time compensation has already been paid, the employee must receive additional overtime pay for each overtime hour worked in the week at one-half this regular rate.

In other words, if an employee is paid a salary of $500.00 per week on a fluctuating workweek basis and they work 45 hours one week, their overtime pay is calculated as: $500/45 hours = $11.11 regular rate. Since their salary covers all hours worked at straight time, they are due half-time pay for hours worked over 40: $11.11 / 2 = $5.56 x 5 hours = $27.78.

For the fixed salary for fluctuating hours method to be valid:

  • the employee must have a work schedule with fluctuating hours
  • the employee must be paid a fixed salary that is meant to be straight-time compensation for all hours worked in a workweek
  • no reduction in the salary may be made for short workweeks
  • the salary must be large enough to ensure that the regular rate will never drop below minimum wage

In May 2020, the Department of Labor issued a new rule loosening the restrictions on employers’ use of the fluctuating workweek method to calculate overtime pay for non-exempt salaried employees. Since this method results in employees getting less overtime pay, workers’ rights advocates did not want to encourage more employers to use the fluctuating workweek method. The new rule allows employers to pay additional compensation based on the number of hours worked, such as bonuses, premium pay, or differential pay, in addition to paying a fixed salary and still take advantage of the fluctuating workweek method.

If You Believe You Could Be Missing Overtime Pay, Contact an Experienced Workers’ Rights Attorney

At Lore Law Firm, we represent workers across the United States and help them recover the overtime pay to which they are entitled. We work on a contingency fee basis, meaning you don’t pay us anything unless we successfully recover payment for you. Call us today at 866-559-0400 or complete our contact form to speak with a workers’ rights attorney and discuss your case.

Frequently Asked Questions About Salary & Overtime

If you believe you are owed overtime pay, you should first find a law firm that represents workers in claims for unpaid overtime and discuss your specific situation with them to find out if you have a valid claim. You should be ready to share information regarding your position, such as your primary job duties, how many hours you work per week, how much you are paid, and any other payment information such as pay stubs.

The calculation for overtime pay is your regular hourly pay rate × 1.5  × overtime hours worked. You can also use the overtime pay calculator on our site.

The Fair Labors Standards Act requires employers (not employees) to keep records of the amount of hours worked by each employee. If your employer does not keep record of overtime hours, a presumption will be granted to the employee in regards to their testimony that they worked those extra hours. Additionally, an employee can reference all types of other evidence to help establish the hours worked, including computer log ins, security swipes, emails/text messages and the testimony of coworkers.

Yes, if you are a salaried employee who earns less than$$35,568 yearly or $684 each week, you may be entitled to overtime pay if you work more than 40 hours a week. Even salaried employees who meet these earnings requirements may be entitled to overtime pay if their job duties do not involve management, supervision and/or operational decisions regarding the running of the business. 

The main difference is that exempt employees are not entitled to overtime pay while nonexempt employees are. Find out if your job is exempt or non-exempt.

Client Reviews

★★★★★

A situation that involves attorneys is emotional - Mike Lore is an attentive listener and really helped me come to the terms of my situation. He used his understanding of the law to construct a case that was grounded in fact and skipped the needless 'finger-pointing' and 'he-said/she-said' back and forth. Mike's professionalism with me (the client) and the opposing attorney moved the case forward quickly with a successful result.

- E.S.

★★★★★

After talking to HR and trying to find answers to my questions about the overtime laws online, I was so confused. I contacted the firm and spoke to Stacy. She was so nice and took the time to review my pay stubs. She explained what the law requires and how it applied to my job. Turns out I do not have a case. Even though I didn’t have a case, she sent me a follow up email with even more information. So glad I called them.

- P.A.

★★★★★

We live in another state, but my husband's company sent him to work in Texas for 6 months. With the laws being completely different from our home state, it was nice to speak to a professional that could put us at ease and explain the laws to us.

- D.E.

Scroll To Top