Do Salaried Employees Get Overtime Pay?

Short answer: yes, many salaried employees are owed overtime. Being paid a salary does not automatically make someone exempt from overtime. Under the federal Fair Labor Standards Act (FLSA), an employee is exempt only if they meet all three tests — and a surprising number of salaried workers don’t.

The three tests for overtime exemption

• Salary basis: paid a fixed salary that doesn’t drop based on hours or quality of work.
• Salary level: paid at least the federal threshold (check the current FLSA minimum, which is periodically updated; some states set a higher bar).
• Duties test: the job’s primary duties are genuinely executive, administrative, or professional — not the job title, the actual responsibilities.

Miss any one of these and the employee is non-exempt and owed 1.5× their regular rate for hours over 40 in a workweek — salary or not.

Where employers get this wrong

The most common mistake is assuming “salaried = exempt.” A salaried office manager who mostly does routine data entry, or an “assistant manager” who spends most of the shift doing the same work as hourly staff, often fails the duties test and is owed overtime. Job titles don’t decide it; the day-to-day work does.

State rules can be stricter

Several states set a higher salary threshold or a tougher duties standard than federal law, and a few (like California) add daily overtime. When state and federal rules differ, the employee gets whichever is more favorable.

What this means for your business

Misclassifying a salaried worker as exempt is one of the most expensive wage-and-hour mistakes — back pay, liquidated damages, and penalties add up fast. The safe move is to track hours for any salaried role you’re not certain about, so you have clean records if classification is ever questioned. A simple time clock makes that painless without changing how you pay people.