Dispelling the 10 Biggest Wage and Hour Myths: Part V

Wage and Hour Myth #5

All salaried employees are exempt.  This is probably one of the most common wage and hour myths out there.  Many employers assume that because an employee is being paid a salary, he or she is not entitled to overtime.  WRONG!  Paying an employee on a salaried basis is only one requirement of the FLSA’s white collar exemptions (executive, professional, and administrative).  If the employee’s job fails to satisfy each of the duties requirements of the exemption, the employee will not be exempt and will be entitled to overtime for all hours worked in excess of 40 in a work week.  Paying a clerical employee a salary does not make the employee exempt from the FLSA’s overtime requirements.  The salary question is simply the first box that needs to be checked.  If you are not paying the employee a guaranteed salary of at least $455 per week, the employee cannot be exempt.  After this requirement is met, however, you need to make sure the rest of the boxes for the exemption are also checked.  If not, the employee must keep a record of all time actually worked and be paid overtime for all hours worked in excess of 40 each week.

Do not make the mistake of assuming that an employee is exempt from overtime simply because he or she is paid a salary!

Check back tomorrow for Wage and Hour Myth #6.