Update 10/19/2022
You are not excluded from receiving overtime pay because you are paid a salary.
Example of Overtime for a Salaried Employee
The manner in which someone is paid, in and of itself, does not determine whether someone receives overtime pay. An employee being paid a 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. The regular rate of pay is determined by the salary being divided by the hours it was meant to cover. Lets take an example. An employee receives $600.00 per week as a salary. The salary is meant to cover 40 hours. The employee’s regular rate of pay would be $15.00. As such the employee is entitled to $22.50 per hour in overtime pay for each overtime hour worked over forty hours.
In contrast, lets assume the same employee’s $600.00 per week salary was meant to cover all hours worked. Then the rate of pay is calculated by dividing the $600.00 by the hours worked in the workweek. Let’s say the employee worked 50 hours in a given workweek. The employee’s regular rate of pay would be calculated by dividing the $600.00 salary by the 50 hours worked. The employee a regular rate of pay would be $12.00 per hour. The employee would be entitled to an additional $6.00 in overtime pay for the 10 hours of overtime.
Yet, there are salaried employees not be entitled to overtime. This is because they are “exempt” from federal overtime laws.
Being Paid a Salary Can Result in Not Receiving Overtime
There is an exemption called the executive exemption.
Executive Overtime Pay Exemption
The facts that an employer must demonstrate for the executive exemption are:
- $455 salary per week;
- Primary duty is the management of the enterprise ;
- 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.”
Being paid a salary does not mean your are not entitled to overtime pay. If you are a salaried employee and you have questions regarding your right to overtime pay, please contact the employment lawyers at LaBar & Adams, P.A. in Orlando at 407-835-8968 or fill out the online form located on our website.
