Many employers incorrectly assume that if an employee is salaried (paid a flat amount rather than an hourly wage and not subject to partial-day or partial-week deductions), that employee is exempt from overtime. Unfortunately, and perhaps not surprisingly, this is not always the case.
Generally speaking, being paid on a “salary basis” is a prerequisite for exemption from overtime, but a salary alone does not mean an employee is automatically exempt from overtime. In addition to receiving a salary, the employee must also fall within one of several exemptions based on their “primary” job duty. A few common exemptions involve the “white collar exemptions” from overtime, including executive, administrative, learned professional, creative professional, outside salesperson, and computer professional exemptions.
In other words, when determining whether a salaried employee is exempt from overtime, the court will take into consideration more than just how the employee is paid, and will closely examine what the employee’s actual duties and responsibilities are.
Certain employees will fall outside this analysis, regardless of their job duties. This includes employees who earn less 
than the current minimum salary threshold ($23,600).
This means that many (not all) employees who earn less than $23,660 per year are entitled to overtime as a matter of law, regardless of their actual duties. Indeed, last year the DOL issued new proposed regulations that would raise the minimum salary threshold to a projected $50,400 per year, with automatic adjustments each year. With final regulations expected to be issued this summer, employers are encouraged to look carefully at any employees earning less than $50,400 who are classified as exempt in order to determine whether to raise their salary, convert them to overtime-eligible, change their job duties, or carefully control their hours going forward.
At present, there is no bright line rule that determines whether an employee is eligible for overtime. To be certain that you are properly classifying your employees, whether salaried or hourly, contact experienced business lawyer Drew E. Pomerance today.
