Exempt employees are not eligible for overtime pay. Nonexempt employees are eligible for overtime pay. Here is more information on how to determine whether your employee can be classified as exempt.
If your employee does not qualify as exempt, they are nonexempt, which means they are eligible for overtime pay and other protections of the wage and hour laws. That way employees will continue to be exempt and will not be eligible for overtime pay. Remember, you still need to make sure your employees meet the other requirements to be exempt.
Nonexempt employees are also subject to other legal requirements like taking meal breaks and rest periods, under applicable state law. The new overtime rules are designed to help employees by potentially making over four million people newly eligible for overtime pay. Their employer may choose to give them a raise to bump them to the new salary threshold. In any of these scenarios, these employees should be better off thanks to the new overtime rules.
One final change in the new overtime rules is that in some instances, employers may be able to count certain nondiscretionary bonuses and commissions toward up to ten percent of the new minimum salary threshold. For jobs that meet those requirements, the employee is exempt. Learn more about the difference in job types for exempt and nonexempt employees here.
The Federal Fair Labor Standards Act overtime exemptions are based on job duties, with the primary duty and responsibilities of a role determining whether that role qualifies for an exemption.
Overtime exemptions under the FLSA include:. Keep in mind that, under the FLSA, the overtime exemptions, minimum salary threshold, and duties tests only apply to white-collar jobs—and not blue-collar workers or police officers, firefighters, or first responders.
The way you calculate overtime rates for salaried employees is a little more involved than calculating overtime for hourly employees. From there, you would multiply their regular rate of pay by 1. You can do all of this automatically with the right tool. Employees can clock in and clock out from wherever they are in just a few clicks—no paper timesheets required. Since the Hourly platform incorporates time tracking data with payroll , your employees are automatically compensated for their overtime hours each pay period.
But no need to switch all three right away, you can start with time tracking and add features as you go. As an employer, under the FLSA, you have the right to terminate any employee that refuses to work overtime—including salaried employees. Bottom line? There are plenty of special exemptions for overtime pay by the FLSA. Many of these include commission-based pay structures and blue-collar jobs. For full details, you can visit the Department of Labor Exception Page. Keeping track of employees and how long they are working is the first step to getting a handle on overtime.
Time tracking is a must for all employees who are eligible for overtime pay. By looking at their time data, a manager can how an employee is spending their time and can help to expedite their projects, reallocate their hours, or change their role or compensation to stay within compliance with the federal overtime law. Another way to avoid overtime payment is to make sure that an employee is being paid above the requirement for overtime exemption.
As of Dec. Raising salaries to be above this threshold will allow employees to work more than 40 hours per week and still be paid by their salary —but not require overtime compensation.
For some organizations, it can difficult to decide whether or not to pay employees overtime or to raise their salary. For "white collar," salaried employees, you'll also want to create an after-hours communications policy , and mobile and social media guidelines that help your managers ensure their team is not working additional or unapproved overtime hours.
This site provides practical information regarding the content covered. This website does not provide legal, business or tax advice.
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