Should I Be Getting Paid Overtime as a Salaried Employee?

posted by Scott Behren  |  Jun 4, 2010 8:14 PM [EST]  |  applies to Florida

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On many occasions, employees come to me who are working dozens of hours for their employers, but are not getting paid overtime.  I ask them why and the response is , I'm salaried or I'm exempt.  However, you should be aware that just because your employer calls you salaried or exempt does not necessarily make it so as a matter of federal law.  I mean, if your employer calls an apple an orange, it does not make it so, right?

In many instances, employers will call an employee exempt and pay them a salary merely to avoid having to pay their employees overtime.  Getting your employee to work for as many hours as possible for no additional compensation makes good business sense, right?  But its not fair to employees.

So the question for you to determine and ask the U.S. Department of Labor or an employment law attorney is whether I am really an exempt salaried employe or not.  This is not a simple question and the body of Federal law that governs this area,  the Fair Labor Standards Act or FLSA, is complex.

On of the areas that an employer is entitled to pay an employee a salary and call them exempt is if they are in a management or executive type of position.  There are a number of guidelines issued under the Fair Labor Standards Act which determine whether or not you are really a manager who should not get overtime.  I have had many clients where they were called "assistant manager" by their employer to avoid being paid overtime, but according to law should have been paid hourly with overtime.

With few exceptions, to be exempt an employee must (a) be paid at least $23,600 per year ($455 per week), and (b) be paid on a salary basis, and also (c) perform exempt job duties. These requirements are outlined in the FLSA Regulations (promulgated by the U.S. Department of Labor). Most employees must meet all three "tests" to be exempt.

An employee who meets the salary level tests and also the salary basis tests is exempt only if s/he also performs exempt job duties. These FLSA exemptions are limited to employees who perform relatively high-level work. Whether the duties of a particular job qualify as exempt depends on what they are. Job titles or position descriptions are of limited usefulness in this determination. (A secretary is still a secretary even if s/he is called an "administrative assistant," and the chief executive officer is still the CEO even if s/he is called a janitor.) It is the actual job tasks that must be evaluated, along with how the particular job tasks "fit" into the employer's overall operations.

There are three typical categories of exempt job duties, today I am just going to discuss executive or management level job duties.

Job duties are exempt executive job duties if the employee

  1. regularly supervises two or more other employees, and also
  2. has management as the primary duty of the position, and also,
  3. has some genuine input into the job status of other employees (such as hiring, firing, promotions, or assignment of job tasks)

"Mere supervision" is not sufficient. In addition, the supervisory employee must have "management" as the "primary duty" of the job. The FLSA Regulations contain a list of typical management duties. These include (in addition to supervision):

  • interviewing, selecting, and training employees;
  • setting rates of pay and hours of work;
  • maintaining production or sales records (beyond the merely clerical);
  • appraising productivity; handling employee grievances or complaints, or disciplining employees;
  • determining work techniques;
  • planning the work;
  • apportioning work among employees;
  • determining the types of equipment to be used in performing work, or materials needed;
  • planning budgets for work;
  • monitoring work for legal or regulatory compliance;
  • providing for safety and security of the workplace.

Determining whether an employee has management as the primary duty of the position requires a case-by-case evaluation.   This is why if you have any doubts, you should consult with the U.S. Department of Labor or with an employment law attorney.

Will try to cover over the next couple of days some of the other FLSA exemptions.  A listing of many other exemptions contained in the FLSA are on the U.S. Department of Labor web site at http://www.dol.gov/elaws/esa/flsa/screen75.asp.

Don't let your employer take advantage of you.....get the overtime you deserve.

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