Salaried Does Not Mean You Lose Overtime

Exempt and non-exempt

Overtime rules protect non-exempt employees. Exempt employees are outside them. The words describe a legal status, not a job title or a payment method — and the default is non-exempt. An employer claiming exemption has to establish it.

To be exempt under the most common categories, an employee must satisfy all three of the following. Failing any one means non-exempt, and overtime applies.

1. The salary basis test

You must receive a predetermined amount each pay period that does not vary with the quality or quantity of work. If your pay is docked for working fewer hours, or reduced in a slow week, you are probably not being paid on a salary basis regardless of what the arrangement is called.

2. The salary level test

The salary must meet a minimum threshold set by regulation. This figure is revised periodically — it has changed several times in recent years and has been the subject of litigation — so check the current Department of Labor figure rather than a number you remember. Some states set a higher threshold than the federal one, and where they do, the higher one applies. California's is tied to its minimum wage and is substantially above the federal level.

3. The duties test

This is the one that actually decides most cases, and the one employers most often get wrong. The job must primarily involve exempt duties — executive, administrative, professional, outside sales or certain computer roles — as they are defined in regulation, not in ordinary speech.

Executive generally requires managing a recognised unit, directing at least two full-time employees, and genuine authority over hiring and firing.
Administrative requires office work directly related to management or general business operations, and the exercise of independent judgement on significant matters. Following detailed procedures, however skilfully, is not this.
Professional generally requires advanced knowledge in a field of science or learning, usually acquired through prolonged specialised instruction.

What does not make you exempt

Being paid a salary. On its own, not sufficient.
Having "manager" in your title. A shift manager who spends most of their time serving customers is frequently non-exempt, whatever the badge says.
Signing something. Employees cannot waive FLSA rights by agreement. An agreement not to claim overtime is unenforceable.
Working in an office. Not a test.
Being paid well. Above a very high total-compensation figure the duties test is relaxed, but ordinary high pay does not remove it.

Why misclassification is common

Because it is cheap and rarely challenged. Reclassifying a role as exempt removes overtime liability entirely, and the employees affected usually believe the label is definitive. Restaurant assistant managers, retail supervisors, junior "analysts" doing routine processing, and IT support staff described as engineers are the categories that come up most often in enforcement actions.

If you are salaried, work more than 40 hours regularly, and spend most of your time doing the same work as the people you supposedly supervise, the classification is worth examining.

What to do if you think you are misclassified

Write down what you actually do, with rough proportions of time. The duties test turns on the real work, not the job description.
Keep your own hours record. Exempt employees often are not tracked, so there may be no record but yours. A contemporaneous note is evidence; a reconstruction from memory is much weaker.
Ask your employer in writing which exemption they are relying on. The answer is informative either way.
Contact your state labour department or the federal Wage and Hour Division. It is free, and back pay for misclassification can run to two or three years.

If you are non-exempt

Then the ordinary rules apply, and the timesheet calculator is doing the right arithmetic for you. Being salaried does not change that — it changes how your regular rate is worked out, by dividing the salary by the hours it is intended to cover.

Salaried does not mean you lose overtime