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Overtime Pay for Salaried Employees

Only 8% of full-time salaried workers receive overtime pay, as opposed to 62% in 1975, according to the U.S. Department of Labor. As of 2015, the only employees who automatically qualify for overtime pay on a salary are those earning $23,660 a year or less. New rules could elevate that overtime eligibility ceiling to as high as $50,440 to better match overtime pay and minimum salary with the cost of living.

29 C.F.R. 778.113(a)

To figure out the regular rate of pay for an employee who gets a salary but is not exempt from overtime, we look to 29 C.F.R. 778.113(a). This says that you can divide a non-exempt employee’s salary by their hours worked to find the “regular rate.” If a salaried employee makes $23,000/year, their regular rate of pay is $575.00 for a 40-hour workweek. Any hours worked past 40 hours per week should be compensated at time-and-a-half.

Salaried and Nonexempt

Some employees are exempt from overtime pay, but some employees may be misclassified as exempt when they should actually be nonexempt. The Fair Labor Standards Act (FLSA) lists the following employees / duties as exempt from overtime pay:

  • Sales employees who get a commission
  • Computer professionals paid minimum $27.63/hour
  • Those employed by a motor carrier
  • Farmworkers
  • Auto dealership employees (mechanics, partsmen, and salesmen)
  • Seasonal employees
  • Executives and professionals
  • View a full list of overtime exemptions

Employers cannot pay their employees a salary simply to get out of paying overtime. Likewise, they cannot misclassify an employee as a salaried exempt worker if their actual job duties do not fit the criteria of one of the FLSA’s exemptions. If you believe that you are misclassified, or your employer is refusing to pay you overtime simply because they pay you a salary (regardless of what that salary is), then we encourage you to contact a Houston overtime attorney at Bailey Cowan Heckaman PLLC.

We offer free evaluations for anyone concerned about their right to overtime pay. Get in touch with us today to learn your rights and legal options!

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