It is important to have a good grasp on key aspects that determine eligibility to gain a better understanding of whether or not a salaried employee can receive overtime pay.
Here are the conditions under which a salaried employee may be owed overtime:
Non-exempt status: The employee must be classified as non-exempt under relevant labor laws, such as the Fair Labor Standards Act (FLSA) in the United States. Non-exempt employees are entitled to overtime pay, while exempt employees are not.
Salary level: The employee must earn less than the minimum salary threshold established for exempt employees. As of 2021, the FLSA set this threshold at $684 per week or $35,568 per year. Employees earning below this amount are generally considered non-exempt and eligible for overtime pay.
Salary basis: While non-exempt salaried employees receive a consistent salary, they are still eligible for overtime pay when they work more than the standard hours in a workweek.
Job duties: The employee’s primary job duties must not fall under the exempt categories, which typically include executive, administrative, professional, or outside sales roles. Employees whose job duties do not meet these criteria may be considered non-exempt and eligible for overtime pay.
When salaried employee is owed overtime, they are typically entitled to receive compensation at a rate of at least 1.5 times their regular rate of pay for each hour worked beyond the standard workweek. This rate may vary depending on the jurisdiction, and some regions may have different overtime thresholds or calculations. Both employers and employees need to be familiar with the specific labor laws governing their workforce to ensure compliance and fair compensation.