Do salaried employees get overtime? - What You Should Know


As employees of companies, we know we slot into many types of contracts. The most prominent, common, and often sought after is that of the salaried worker. The contract that a salaried worker gets is one that tends to offer more protections to the worker themselves over their zero-hour contract or gig economy counterparts.

However, there are reasons that people choose other types of contracts instead. Many need more flexible work or work only for a short time, as such necessitating the less desirable contract. Yet, there is one area where workers from both sides feel either confused or downright hostile. This is, of course, overtime.

Now, for a lot of people overtime is not wanted, not asked for, and often unpaid. Hence, the hostility, which is rightly understandable. For other types of workers, this is the standard for overtime, but with salaried workers, there is a pause. After all, they have more protections than their counterparts, so would they get overtime pay? Or be forced to work without it?

In this article, we seek to find out exactly that.

Also read: How to Engage Employees

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What Is a Salaried Employee?

Many people think of their “boss’s boss” or senior managers as the only type of salaried employee, but that’s not the case. A salaried employee is simply someone who is hired to do a set amount of work, but is not paid by the hour. They will generally have a fixed schedule, such as working from 9 until 5, Monday to Friday, and work through that.

However, they are not required to work beyond that and their pay is not dictated by it. They will receive the same exact pay every single month, no matter whether they are late or call in sick. For the occasions where they are absent, they will receive either sickness or holiday pay, and generally they are entitled to many benefits that hourly or other workers don’t have.

These include healthcare, cultural holidays, paid days off, and more leeway with their bosses. While they get more benefits, this does not mean that they are let off the hook for everything. The salaried worker still has to work hard and prove that they are doing a good job, and there will be regular meetings about the salaried worker's performance.

Also read:  Becoming a Successful Talent Scout


What Is Overtime?

Overtime is essentially the time spent additional to the usual hours of work. It is usually worked at an hourly rate, and the idea was introduced with the Fair Labor Standards Act (FLSA) in 1938, though it wasn’t really enforced until the 1950s. Prior to that, there was no federal law to regulate it. In fact, many employers used to not pay overtime to their employees.

When this act was introduced, it was a landmark in the US, as workers were pretty much treated how the company liked and many people died due to poor working conditions as a result. Even after the act was passed, many employers simply refused to allow employees to work beyond their hours, so they wouldn’t have to pay them. Instead, they would either demand they stop working, demand they work for free while telling no one, or fire them on the spot.

As such, workers had to really fight to get overtime pay and with more government oversight, it has become the standard in the US. All non-exempt employees are now entitled to overtime pay of one and a half times their regular pay if they have to work overtime in any capacity

Also read: Skill Assessment is Important During Hiring the Process

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Do Salaried Employees Get Overtime Pay?

Overtime pay is a tricky thing when it comes to salaried workers. While the law does state that overtime pay is required for salaried employees in some industries, such as health care, it does not cover every situation.

There are plenty of industries where salaried workers may not be eligible for overtime pay, however, if you are unsure, check with your employer, as they are required to keep track of all time spent working.

The reason is, as we said before, all non-exempt employees are entitled to overtime pay of time and a half, even salaried workers. As such, it may be better to know who is exempt from overtime pay, rather than discuss who isn’t.

To be declared exempt from overtime pay, you must have both of the following:

- Have a weekly base salary above the department of labor’s minimum salary threshold, which amounts to $684 per week or $35,568 per year.

- Meet the qualifications for one of the Fair Labor Standards Act overtime exemptions.

The exemptions for this act are based on the duties of your specific job in your specific industries. Since they are so numerous, we cannot unfortunately list them all. Still, we can give you the industries, and you can see if yours is on the list. If it is, then you need to look at the FLSA to find out whether you would be exempt:

- Administrative exemption.

- Computer employee exemption.

- Executive exemption.

- Highly compensated employees’ exemption.

- Outside sales exemption.

-  Professional exemption.

If you are in these two specific categories, then you are not entitled to overtime pay. Nonetheless, if you are not in these two categories, then you are entitled to overtime pay and should report it if you are not receiving it while working overtime.

Also read: 7 Employee Benefits and Compensation Ideas 


Can a Salaried Worker Refuse Overtime Work?

While it is not explicitly stated in the law, many experts believe that a salaried worker can refuse overtime work. This is because the salaried worker is in a position of more power than their hourly counterparts, namely the boss. Also, if the work is not part of the agreed schedule, the worker has the right to refuse it.

However, while the salaried worker does not need to accept overtime work, you could let them go or fire them for refusing. Though a word of caution here, as many experts believe this is all round a bad move from a business perspective.

Salaried workers are given a lot of concessions and as such tend to be people with a lot of skill who are highly valued, amongst the managers and the other workers. If you fire a salaried worker for not doing overtime, then your reputation amongst your workers is going to drop way down. This will not only make it harder for you to encourage your workers to do their jobs, but your employee retention will drop completely as well.

Many may simply leave and find other work because of how you acted. This will cause an employee shortage for you, as many of your former workers will not stay quiet about your actions and potential employees are likely to stay away from applying for any positions in your company.

Also read: Give Feedback To Employees

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Almost all workers are entitled to overtime pay, even salaried workers. It is written into law and only a few exemptions exist. If you are not paying your workers overtime, you better have a good reason, as if one of those workers goes to court, you will find yourself in trouble.

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Do salaried employees get overtime? - What You Should Know
James Wilson

After graduating from McCombs School of Business in Texas, James joined ThePayStubs as a CPA to make sure the numbers we provide our clients are correct. Read More

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