Employment Law Articles
Am I entitled to overtime even though I receive a salary?
By Scott Adams | Employment Law Attorney
Published on May 20, 2016
The short answer to this questions is: the fact that you are paid a salary alone does not mean you are not entitled to overtime pay.
The manner in which someone is paid, in and of itself, does not determine whether someone receives overtime pay. The fact that an employee is paid and salary alone does not exclude the employee from receiving overtime pay or minimum wage. Being paid by a salary does affect the method of how the overtime pay is calculated. A salaried employee is entitled to time-and-a-half of the regular rate of pay. A salaried employee’s regular rate of pay is calculated by dividing the salary received by the amount of hours that salary was meant to cover. For example, if someone receives $400.00 per week as a salary and the salary is meant to cover 40 hours, then the employee’s regular rate of pay would be $10.00. Thus, the employee is entitled to $15.00 per hour in overtime pay for each overtime hour worked over forty hours.
Furthermore, if after you divide the salary received by an employee and by the amount of hours that salary was meant to cover the employee’s hourly rate is below the mandated minimum wage required to be paid for each hour worked, then the employer has violated minimum wage law.
However, if the same employee’s $400.00 per week salary was meant to cover all hours worked in the workweek, then the rate of pay is calculated by dividing the $400.00 per the hours worked in the workweek. For example, let’s say the employee worked 50 hours in a given workweek, the salaried employee’s regular rate of pay would be calculated by dividing the $400.00 salary by the 50 hours worked giving the employee a regular rate of pay of $8.00 per hour. This salaried employee would be entitled to an additional $4.00 in overtime pay for the 10 overtime hours worked in the workweek.
While the foregoing is true, some salaried employees may not be entitled to overtime because they are what is known as “exempt” from federal overtime laws. For example, there is the so-called “executive exemption.” Being paid a salary is one of the facts to be considered in an employer establishing the “executive exemption.”
Executive Overtime Pay Exemptions
The facts to consider for the executive exemption are:
- The employee receives a salary not less than $455 per week;
- The employee’s primary duty is the management of the enterprise in which the employee is employed.
- The employee customarily and regularly directs the work of two or more other employees and
- the employee has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are given “particular weight.”
As the foregoing demonstrates, just because an employee is paid a salary does not mean the employee is not entitled to overtime pay. If you are a salaried employee and you have questions regarding your right to overtime pay you should contact our experienced Overtime pay lawyer in Orlando, FL.
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