Are you eligible for overtime pay? Just because you are a salaried employee doesn't mean you are automatically disqualified. Many employees are robbed from their entitled overtime pay due to lack of knowledge about their rights. This SlideShare presentation will clear up some common myths about salaried workers and overtime pay to help you to make sure you are receiving the proper entitled pay.

1. Salaried Workers and
Overtime Pay
What Employees Need to Know

2. Are Salaried Workers Eligible
For Overtime Pay?
• Many employees are told, “If
you are paid a salary you are
not entitled to receive
overtime pay.”
▫ This is a myth
• Being paid a salary doesn’t
automatically disqualify you
from overtime pay
• The next few slides will discuss
what determines if a salaried
employee is entitled to receive
overtime pay

3. Exempt or Non-Exempt?
Here are the Questions You Should Ask
• Ask yourself these questions to
determine if your job is
exempt or non-exempt from
overtime labor laws:
▫ 1. Are you paid at least $455
each week?
▫ 2. Do your job duties and
responsibilities meet certain
requirements?

4. The US Department of Labor’s
Definition of Salaried Pay
• According to the US
Department of Labor, “[b]eing
paid on a salary basis means
an employee regularly receives
a pre-determined amount of
compensation each pay period
on a weekly, or less
frequent, basis” and that the
“pre-determined amount
cannot be reduced because of
variations in the quality or
quantity of the employee’s
work”.
Image Credits: Bill Holmes

5. How Your Pay Can Effect Overtime
Eligibility
• Consider both the amount you are paid and the structure
• Just because you are paid at least $455 each week does not mean
you are paid on a “salary basis”
• An exempt employee must receive their full salary for any week in
which they do any work, regardless of the number of days or hours
worked
• Employees do not need to be paid for any workweek in which they
perform no work

6. Can Your Job Duties and Responsibilities
Effect Overtime Eligibility?
• For workers who are Supervisors, Manager and the like, the
Executive Exemption may apply
• For those who actively participate in the operation of a business, the
Administrative Exemption may apply
• Other exemptions may apply to certain professional, computer, and
outside sales employees
• Industry specific exemptions may apply to workers that range from
movie theater workers to seamen and to maple sap workers

7. When Are Employees Exempt
From Overtime Regulations?
• Only if both the salary test and
the duties test are met can a
job be properly classified as
exempt from overtime
regulations

8. How are Non-Exempt
Salaried Employees Paid?
• While they may be paid a
salary, they must also be paid
overtime for all hours worked
over forty each workweek.
• They are entitled to receive
overtime pay at the rate of one
and a half times their regular
rate of pay

9. What is Chinese Overtime?
• A common method referred to as a fixed salary for fluctuating hours
• The regular rate of an employee will vary from week to week
• The regular rate is obtained each week by dividing the salary by the
number of hours worked in the week
▫ It cannot be less than the applicable minimum wage in any week
• Since straight-time compensation has already been paid, the
employee must receive additional overtime pay for each overtime
hour in the week at not less than one-half this regular rate

10. Example of Chinese Overtime
• If an employee is paid a salary of $1,000.00 per week on a
fluctuating workweek basis and works 45 hours one week, their
overtime pay for the week is calculated as:
▫ $1,000/45 hours = $22.22 regular rate
• Since the salary covers all 45 hours worked at straight time, they are
due half-time pay for the 5 hours worked over 40:
▫ $22.22/2 = $11.11 x 5 hours = $55.56

11. How to Use the Chinese Overtime Method
• The employee must have a work schedule with fluctuating hours
▫ They cannot be on a fixed schedule
• Employees must be paid a fixed salary that is meant to be straight-
time compensation for all hours worked in a workweek, whether the
employee works less than or more than 40 hours per week
• With almost no exceptions, no reduction in the salary may be made
for short workweeks
• The salary must be large enough to ensure that the regular rate will
never drop below minimum wage

12. Conclusion
• Federal and state labor laws on overtime place the responsibility for
properly classifying workers as either exempt or non-exempt solely
on the employer
• If workers are not informed and aware of their rights, they cannot
take steps to effectively stop illegal pay practices that may deny
them the overtime pay them are entitled to receive
• A private wage and hour lawyer, state workforce commissions, and
the US Department of Labor can provide additional resources to
help employees become aware of and better understand their rights