Salaried employees enjoy several benefits compared to those working for an hourly wage. For example, your employer won't dock your pay if you take an extra hour at lunch. However, you are also expected to work late if necessary to complete your job. Your status under the Fair Labor Standards Act, which sets the standards for minimum wage and overtime, determines your rights if your employer decides to increase your hours.
Exempt vs. Non-Exempt
While many people commonly assume that salaried employees are exempt and therefore not entitled to overtime pay, this is not the case. An employee must meet strict qualifications to be considered exempt. The main types of exempt employees include executive employees, administrative employees, learned professional employees, creative professional employees, computer employees, highly compensated employees and outside sales employees. Check with the Department of Labor Wage and Hour Division to determine if you meet the criteria of an exempt employee. If not, you are considered non-exempt and are entitled to overtime pay.
Many salaried employees are considered exempt under FLSA. If you are exempt, you are expected to work as many hours as necessary to fulfill the duties of your job. In addition, your employer may increase your hours and is not required to pay you overtime. As an incentive, your employer may offer additional compensation in the form of bonuses, paid time off, a percentage of sales or other commissions. Additional compensation is not required for salaried employees under FLSA.
If you are a non-exempt, salaried employee, you are entitled to overtime pay if your employer increases your hours to more than 40 hours per week. Overtime pay must be equal to one and one-half times your regular pay for each hour over 40, plus your salary. Regular pay is calculated by dividing your salary by the number of hours you work for that salary.
Employers must prove that an employee meets the criteria for exempt status. If an employee files a complaint, the Wage and Hour Division will conduct an investigation. If a company willfully or repeatedly violates FLSA by not paying a non-exempt, salaried employee overtime pay, they may be fined up to $1,000 per violation. Willful violators may also face criminal charges and face fines up to $10,000 and imprisonment. The employee also is entitled to recover back pay.