When employers cheat their employees out of their hard-earned money, the dollars add up. A recent study confirmed this by finding that workers in North Carolina alone are owed over $3.6 billion in unpaid overtime. There are a number of reasons employers engage in wage theft, and the practice is prevalent in other states as well. Has your employer been denying you the overtime pay you deserve? Talk to us about your legal options.
Unpaid Overtime in North Carolina
Salaried North Carolina workers are owed $3.6 billion in overtime just from the year 2022, according to a newly released study. The same report also claims that the average North Carolinian worked 1.7 hours of overtime each week in 2022 but was not paid for it. The study highlights the fact that employees who earn a salary are often denied overtime pay and mistakenly believe they are not entitled to overtime pay.
But overtime is not limited to hourly workers, and just because an employee is paid a salary does not mean that individual does not have to be paid overtime.
“Unfortunately, it’s something we see regularly,” Clermont Ripley, co-director of the Worker’s Rights Project of the North Carolina Justice Center, said. “We see this very common misconception that if you pay someone on a salary that they are never entitled to overtime. And that’s actually just not correct.”
North Carolina Is Not Alone
All other states reported some amount of unpaid overtime for workers. Some states, such as South Dakota with $79.8 million, are on the low end. But others have staggeringly high figures. Workers in California, for example, are estimated to be owed $23.4 billion. In Florida, the total amount of unpaid overtime sits at $11.4 billion. South Carolina workers are owed about $2 billion in unpaid overtime. According to the authors of the study, Marylanders are working the most for free, with the average employee working about 3.5 hours of unpaid overtime per week in 2022.
Understanding Overtime for Salaried Workers
Most hourly workers are entitled to be paid time and a half, or 1.5 times their regular pay rate, for all hours worked over 40 in a week. There are some limited exceptions that allow employers to avoid this obligation. However, these exemptions to the overtime laws are often incorrectly applied. The study exposes how employers mistakenly invoke exemptions to avoid paying overtime – resulting in billions of dollars in wage theft every year.
The Fair Labor Standards Act, or FLSA, is the primary federal law dealing with overtime. According to the FLSA, in order for a salaried worker to be exempt from overtime, both of the following elements must be met:
- The employee must earn a salary above the minimum salary threshold of $684 per week ($35,568/year) (*this salary threshold was due to increase to $844 per week as of July 1, 2024, but see below for an update on these changes); and
- The employee must meet the job duty qualifications for one of the FLSA’s overtime exemptions
Some of the exemptions include:
- Executive. The worker’s primary responsibilities must include managing the business, a department, or a subdivision; directing the work of at least two other employees; and having the authority to make hiring, firing, and related decisions
- Administrative. The employee must perform office or non-manual work directly related to the management or general operations of the business, along with the exercise of discretion and independent judgment with respect to “matters of significance” (as defined)
- Professional. Certain learned professionals may be exempt if their work requires advanced knowledge in a field of science or learning that is acquired by extensive specialized instruction
There are other exemptions for creative professionals, computer employees, and other types of workers. But if you aren’t sure whether your employer is correctly claiming an exemption by not paying you overtime, it’s time to check with a knowledgeable attorney.
Protecting Your Right to Fair Pay
Misclassifying workers is just one way employers illegally deny overtime pay. As the above-mentioned study showed, a great deal of money is being lost to wage theft by employees throughout the country. Are you one of them? Contact The Lore Law Firm today to learn more. Send us your information via our free and confidential client intake form.
*Federal Court Undoes New Salary Threshold Increases
On November 15, 2024, a federal judge appointed by Donald Trump released a decision undoing the 2024 Department of Labor (DOL) rule that increased the minimum salary threshold for exempt employees to $43,888 a year ($844 weekly) effective July 1, 2024, and to $58,656 a year ($1,128 weekly) effective January 1, 2025 (with annual increases thereafter). The court believed that the Department of Labor exceeded its authority by prioritizing salary over job duties when both salary and job duties are required to be considered. While the DOL did initially file an appeal to try to overturn this decision, as of April 29, 2025, the DOL under the Trump administration has asked for a stay of the appeal pending the DOL’s reconsideration of this rule. Therefore, it seems likely that the 2024/2025 salary increases are now dead.
The decision means that the previous salary threshold from 2019 ($684 per week / $35,568 annually) will go back into effect. This decision does not, however, impact any salary threshold changes under state overtime laws (e.g., CA, NY, WA).
