Many Salaried Workers Are Entitled to Overtime
One of the most common employment misconceptions is that if an employee is paid a salary, he or she can be required to work more than 40 hours per week without being paid overtime. In reality, the Fair Labor Standards Act (“FLSA”) requires that employers pay most employees overtime for all hours worked over 40 unless they fall under a specific exception. Unfortunately, employers often misclassify their employees as exempt from the FLSA when in fact they are non-exempt employees entitled to overtime.
The following list provides examples of lawful exemptions from the FLSA’s overtime requirement:
- Executive Exemption: The employee’s primary duty must be managing the business, and the employee must regularly direct the work of at least two full- time employees. The employee must be given the authority to hire and fire employees from the company, or to make recommendations as to hiring and firing that are given particular weight.
- Administrative Exemption: The employee’s primary duty must be the performance of office work directly related to the management or general business operations of the employer, and the employee must assist with the running or servicing of the business. This includes activities such as accounting, auditing, purchasing, advertising, personnel management, or negotiations. The employee’s primary duty must include the exercise of discretion and independent judgment on matters of significance to the company.
- Professional Exemption: The employee’s primary duty must be the performance of work requiring advanced knowledge in a field of science or learning, typically acquired through a college or similar program of instruction. In addition, the employee’s work must require the consistent exercise of discretion and judgment. Common examples of professionals exempt from overtime laws include doctors, lawyers, pharmacists, and engineers.
- Computer Employee Exemption: The employee must engage in duties that require a level of skill similar to that of computer programmers, software engineers, or systems analysts. Exempt computer employees have significant education and/or training in the computer sciences or other technical fields. Employees engaged in manufacturing or repairing computer hardware or software, such as IT Helpdesk employees, are not included in this exemption.
- Outside Sales Exemption: The employee must make sales, or obtain contracts for services or use of facilities, at a location other than their employer’s business.
For more information on exemptions, please see the Department of Labor’s Exemption Fact Sheets: http://www.dol.gov/whd/regs/compliance/fairpay/fact_exemption.htm. If you believe that you may have been improperly classified as exempt from overtime, please contact us at (800) 242-2874, or email one of our wage and hour attorneys, Breanne Snapp or Jason Knutson.