Overtime pay is not for everyone. It’s applicable to employees paid an hourly wage, as well as employees whose fixed salaries fall below the specific salary level set for a given year by the Department of Labor.
The Fair Labor Standards Act (FLSA) requires that at least the federal minimum wage be paid to most employees in the United States for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over the usual cutoff number of 40 hours in a workweek.
But the FLSA provides an exemption from both minimum wage and overtime pay for employees working in the capacity of a bona fide executive, administrative, professional and outside sales employees, as well as certain computer employees.
To qualify for exemption, employees generally must (1) meet certain tests regarding their job duties and (2) be paid on a salary basis at not less than the current amount of $684 per week.
Employers may use nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis, to satisfy up to 10 percent of the standard salary level.
Job titles do not give employees an exempt status.
An exemption applies only if an employee’s specific job duties and salary meet all the requirements of the Department of Labor’s regulations.
Exemptions for executive employees
Exemptions for administrative employees
Exemption for professionals
Exemption for creative professionals
Exemption for computer employees
Exemption for outside sales employees
Exemption for highly compensated employees (HCEs)
The exemptions provided by FLSA do not apply to manual laborers or other blue-collar workers, as well as the police, firefighters, paramedics, and other first responders.
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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.