Exempt vs Non Exempt Employee . I’m salaried, so I shouldn’t get overtime, right? Sorry, that is wrong.

robibaishnab , June 14, 2017

There is a common and recurring misperception among many employees, employers and even attorneys that “salaried” means “exempt” under the Fair Labor Standards Act (“FLSA”) or Ohio wage and hour laws.[1] This is not true. While many exempt employees are salaried,[2] not all salaried employees are exempt.

This misunderstanding often results in underpayment of wages due to employees who would otherwise be entitled to at least minimum wages for all hours worked and/or overtime premiums for hours worked in excess of 40 in a workweek. If the non-exempt employee is hourly, then the regular rate is usually the hourly rate. If the non-exempt employee is salaried, then the regular rate is usually the hours worked in the workweek divided by the amount of salary attributed to that workweek. Please note that other forms of compensation should be calculated into the regular rate for purposes of calculating overtime, such things like many non-discretionary bonuses or safety incentive payments.

While a thorough consideration of all the facts may lead to the ultimate conclusion that your are indeed exempt, you should not automatically accept an “exempt” status simply because you are paid salary and/or because your employer says so.

If you are paid salary and work so many hours that your weekly compensation results in being paid less than $7.25 or $8.10 per hour, or if you work more than 40 hours in a workweek but do not receive an overtime premium, call us at 800-274-5297. Remember, it is unlawful for an employer to retaliate against you for asking questions about your hours worked and wages paid, or otherwise exercising your rights under the FLSA and/or Ohio wage and hour laws.

[1] Note that this is not the same “exemption” as used concerning your taxes. See for example Withholding Exemptions – Personal Exemptions – Form W-4

[2] See for example DOL Fact Sheets 17a and 17g.


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