Even some employers are confused about whether or not salaried employees are legally required to be paid overtime. As a rule, small business owners who limit overtime pay to non-salaried employees eventually discover that being on salary is only one of a number of elements that determine whether or not an employee should be paid overtime wages. In addition, there are exceptions to the rules. Sadly, some small businesses aren't discovering this mistake until they are in court facing a lawsuit for overtime pay violations.

According to the Fair Labor Standards Act of 2004:

• An employee who is eligible for overtime is considered nonexempt. Employees who are not eligible for overtime pay are considered exempt.
• Exempt employees are usually paid a salary, but not all salaried employees are exempt. Some employees paid a salary may be nonexempt even if classified by the employer as exempt. Employers may label the employee exempt precisely to avoid paying overtime.
• In order for an employee to be classified as exempt, their job duties and responsibilities must be taken into consideration.
• Job type and duties of exempt employees must meet 3 requirements outlined by the FLSA.
  • 1) annual income greater than $23,660 unless they are a computer professional. The minimum annual income requirement is $57,470 per year for a computer professional to be classified as exempt,
  • 2) must be treated as salaried employees with a routine pay schedule of a set amount,
  • 3) job duties must be considered “white collar,” such as administrative, executive or professional. The employee must operate with some level of independence on the job and must have the discretion to make decisions on behalf of the company.
• Overtime pay should be one and one half times the regular hourly wage of the employee. When calculating overtime pay, employers should include bonus pay.

It is important to note that employees cannot legally waive their right to overtime pay and also that employers cannot legally offer other time in lieu of overtime. Frequent “other” time employers may offer instead of overtime include rolling the overtime hours into the next week, or offering comp time, for example..

Misclassification of employees is a major problem and can lead to significant and costly overtime pay violations. If you are misclassified as exempt but believe you should be getting overtime pay as required by law, please get in touch with one of the experience Atlanta employment law attorneys at Barrett & Farahany so we can help. We do things differently; justice at work is not only our profession, it's our passion.