Salaried Workers and Overtime Pay: How Does it Work?

The Fair Labor Standards Act (FLSA) requires, among other things, that workers get paid overtime pay, for any hours worked weekly, over 40 hours a week. With per-hour, hourly paid workers, this is often easy to compute: Just see how many hours a worker has worked, see if it’s over 40 hours, and see if the worker has been paid for every hour, or paid overtime.

What About Salaried Workers?

But salaried workers often present a different problem. They aren’t paid hourly, and while they may have set schedules, they often are asked to work and sometimes do work, for more than their stated scheduled hours. Many salaried workers work “until the job is done,” and don’t clock in or clock out.

But most salaried workers won’t get overtime pay because they are considered exempt employees.

As of January 2025, salaried employees who earn more than $58,656 per year, are exempt from the FLSA—that is, they are not protected by most provisions of the law, including the right to receive overtime. That’s out of recognition that many salaried employees receive other benefits that hourly workers don’t get, including, often, the right to be paid when they don’t work, such as with sick or personal days.

But even if you earn less than that, you still may be exempt—that is, not protected by the law. For example, employees who work in administrative, managerial, executive or professional positions, are exempt, by virtue of the nature of their jobs—it doesn’t matter what they get paid. The same goes for those who work in outside sales, and certain retail positions, if there are commissions involved in the salary structure.

What About Non-Exempt Salaried Jobs?

These are broad position descriptions, and most salaried employees will fit in these descriptions, meaning that the law is not applicable to them.

On occasion, there may be jobs which are salaried, which earn less than the threshold amount, and which aren’t in one of those particularly identified exempt categories.

When that happens, the employer must still monitor and track the employees’ hours, to ensure that the employee is not working more than 40 hours in a week without getting overtime pay.

Keeping track of those hours, the employer should be able to determine whether or not the employee has worked more than 40 hours, and thus, would be entitled to 1.5 times the employee’s base hourly salary.

Calculating the Hourly Wage

That of course means that the salary must be broken down into hourly pay mathematically, to see what 1.5x the employee’s salary actually is. This is done by dividing the weekly pay of the salaried employee, by the number of hours worked that week, to come to a regular hourly rate for the salaried employee.

That is the number which is multiplied by the 1.5, to see what the overtime hourly rate should be.

There can be significant damages for violating the FLSA. If you are a salaried employee, and feel you have not been paid overtime, let us try to help you get the wages you are entitled to. Contact the San Jose employment attorneys at the Costanzo Law Firm.

Source:

dol.gov/agencies/whd/overtime/salary-levels