Many employers think they can avoid having to pay overtime by making their employees salaried. Unfortunately, if you’re an employer, simply paying workers on a salary basis is not enough to exempt you from that requirement—in fact, doing so could subject you to expenses well in excess of what that overtime pay would cost you in the first place.
While many states have their own overtime rules, overtime on the federal level is governed by the Fair Labor Standards Act (FLSA). The FLSA requires that any labor exceeding 40 hours in a work week be compensated by overtime pay, at the rate of at least one and one half times the employees’ regular rate of pay. Employees subject to these rules are called non-exempt employees.
There is another category of employees called exempt employees. These individuals fall under exemptions to the FLSA and do not need to be compensated for overtime work. To fall under the exemption, the employee must meet certain criteria in their salary and job duties. There are six (6) categories of employees that qualify for the exemptions:
• Outside Sales
• Highly Compensated Employee
If you have questions about whether or not you or your employees fall under the overtime exemptions, please give us a call so that we can discuss it further.