It's one of the most common and misunderstood topics in the professional world: you've landed a salaried position, but you're working well over 40 hours a week. Does your employer owe you overtime pay? The widespread belief is that "salary" automatically means "no overtime," but the reality is far more nuanced and legally defined.
Misunderstanding your rights can lead to lost income and burnout. Understanding them empowers you to ensure you are being compensated fairly for your hard work. This guide will demystify the rules surrounding salaried employees and overtime pay, giving you the knowledge to analyze your own situation.
Salaried vs. Hourly: Understanding the Core Difference
Before diving into overtime, it's crucial to understand the two primary ways employees are paid.
- Hourly Employees: These individuals are paid a set rate for each hour worked. Under federal law, they are generally entitled to overtime pay—typically 1.5 times their regular rate—for any hours worked beyond 40 in a workweek.
- Salaried Employees: These individuals receive a fixed, regular amount of pay (e.g., $60,000 per year), regardless of the specific number of hours worked in a week. The assumption is that their pay covers all the work required to do the job.
However, simply being paid a salary does not automatically disqualify you from receiving overtime. The decisive factor is your legal classification under the Fair Labor Standards Act (FLSA).
The Decisive Factor: Exempt vs. Non-Exempt Status
The U.S. Department of Labor (DOL) uses the FLSA to set federal standards for minimum wage and overtime pay. The FLSA classifies all employees as either "exempt" or "non-exempt."
- Non-Exempt: These employees are covered by the FLSA's overtime rules. If a salaried employee is classified as non-exempt, they must be paid overtime for hours worked over 40 in a workweek.
- Exempt: These employees are "exempt" from the FLSA's overtime rules and are not legally entitled to overtime pay.
An employer cannot simply declare you "exempt" because you are paid a salary. To be legally classified as exempt, an employee must meet specific criteria related to both their salary amount and their job duties.
Key Factors That Determine Overtime Eligibility
To be considered "exempt" from overtime, most employees must pass both a Salary Basis Test and a Duties Test.
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The Salary Threshold Test
This is the first and most straightforward test. Under the current federal FLSA guidelines, an employee must be paid a salary of at least $684 per week, which amounts to $35,568 per year, to even be considered for exempt status.
Crucial Note: If you are a salaried employee earning less than this amount, you are automatically classified as non-exempt and are entitled to overtime pay, regardless of your job title or duties.
*(Source: U.S. Department of Labor, Fact Sheet #17A)*
It's also important to stay current. The Department of Labor has proposed rules to significantly increase this salary threshold, which would make millions more salaried workers eligible for overtime.
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The Duties Test: Professional, Administrative, and Executive Exemptions
If you meet the salary threshold, your specific job responsibilities must then fit into one of the FLSA's exemption categories. Simply having an impressive title isn't enough; the day-to-day tasks are what matter. The most common exemptions are:
- Executive Exemption: The employee’s primary duty must be managing the enterprise or a recognized department. They must customarily direct the work of at least two other full-time employees and have the authority to hire or fire (or their recommendations on these matters must be given significant weight).
- *Example: A retail store manager who supervises staff and makes hiring decisions.*
- Administrative Exemption: The employee's primary duty must be performing office or non-manual work directly related to the management or general business operations of the employer. This role must also include the exercise of discretion and independent judgment with respect to matters of significance.
- *Example: A Human Resources manager who develops company policy, not an HR assistant who primarily performs clerical data entry.*
- Learned Professional Exemption: The employee’s primary duty must be work requiring advanced knowledge, predominantly intellectual in character, and which includes the consistent exercise of discretion and judgment. This advanced knowledge must be in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction.
- *Example: Doctors, lawyers, engineers, accountants, and scientists.* According to Glassdoor, the average salary for a licensed architect is over $90,000, easily clearing the salary threshold and fitting the duties test for a learned professional.
Other specific exemptions exist, such as for Outside Sales Employees and certain Computer Employees.
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Geographic Location
Federal law sets the minimum standard, but your state can offer greater protections. Several states have their own, more stringent overtime laws, including higher salary thresholds for exempt status.
For example:
- California: As of 2024, the salary threshold for an exempt employee is significantly higher than the federal minimum, tied to the state's minimum wage. It requires an employee to earn at least twice the state minimum wage for full-time employment, which currently exceeds $66,000 annually.
- New York: New York also has a higher salary threshold that varies by location within the state (e.g., New York City, Long Island, and the rest of the state).
- Washington: This state is phasing in increases to its salary threshold, which will also far exceed the federal level.
Actionable Advice: Always check the Department of Labor website for your specific state, as state law supersedes federal law when it is more beneficial to the employee.
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Company Policy and Industry Norms
Even if you are correctly classified as an exempt employee, some companies choose to offer compensation for extra work as a matter of policy to prevent burnout and retain talent. This is common in high-demand industries like tech and consulting. This compensation may not be traditional "overtime" but can take other forms:
- Compensatory Time ("Comp Time"): Paid time off granted for working extra hours.
- Performance Bonuses: Additional pay tied to the completion of projects that required long hours.
- Straight-Time Overtime: Some companies may pay exempt employees their regular hourly equivalent for hours worked over a certain number (e.g., 45 or 50).
While not legally required for exempt staff, these policies can be a significant factor in your overall compensation package.
How to Determine Your Status and What to Do
The career outlook for nearly every professional field involves periods of intense work. The U.S. Bureau of Labor Statistics (BLS) projects overall employment to grow in the coming decade, and with that growth comes the responsibility for both employers and employees to understand compensation laws.
If you are a salaried employee and unsure about your eligibility for overtime, take these steps:
1. Check Your Salary: Does your annual salary fall below the federal threshold ($35,568) or your state's higher threshold? If yes, you are likely owed overtime.
2. Analyze Your Duties: Review the FLSA duties tests. Do your primary, day-to-day responsibilities genuinely align with the executive, administrative, or professional criteria?
3. Review Company Documents: Look at your offer letter, employment agreement, and employee handbook. These may clarify your classification and any company-specific policies.
4. Seek Clarification: If you are still unsure or believe you are misclassified, the first step is often to have a professional conversation with your Human Resources department. If that doesn't resolve the issue, you can contact your state's labor agency or the U.S. Department of Labor for confidential guidance.
Conclusion: Knowledge is Your Most Valuable Career Asset
The answer to "Do you get overtime on salary?" is a definitive "it depends." It is not determined by your payment structure but by your legal classification as exempt or non-exempt.
Here are the key takeaways for any salaried professional:
- Status is Key: Being salaried does not automatically make you ineligible for overtime.
- Mind the Thresholds: Your eligibility hinges on meeting both a minimum salary threshold (federal or state, whichever is higher) and a specific duties test.
- Location Matters: State laws can provide significantly more protection and higher pay thresholds than federal law.
- Advocate for Yourself: Understanding these rules is the first step. The second is ensuring your role is classified correctly so that you are compensated fairly for every hour of your valuable contribution.
By arming yourself with this knowledge, you can navigate your career with confidence, ensuring your hard work is always properly rewarded.