Do Salaried Employees Get Overtime?

Do Salaried Employees Get Overtime?, Warehouse employees reviewing shift hours and timesheets together

It's the most common payroll myth in small business: 'they're salaried, so no overtime.' Salary is just a way of paying, exemption is what decides overtime, and it has its own tests.

Salaried ≠ Exempt

Overtime depends on whether the employee is exempt, not on how they're paid. A salaried employee who doesn't meet the exemption tests is salaried non-exempt, and is owed 1.5× for hours over 40, calculated from their salary-derived hourly rate.

The Two Tests for Exemption

To be exempt under the white-collar exemptions, an employee generally must (1) earn at least the federal salary threshold (check the current figure, it changes), and (2) pass a duties test: genuine executive, administrative, or professional responsibilities, like managing two or more people or exercising independent judgment on significant matters.

Job titles don't matter. An 'assistant manager' who mostly runs a register is likely non-exempt no matter what the offer letter says.

How Overtime Is Figured for Salaried Non-Exempt Staff

Convert salary to an hourly regular rate (for a 40-hour week: weekly salary ÷ 40), then pay 1.5× that rate for overtime hours. You still need accurate time records for salaried non-exempt employees, that's the part most small employers miss.

Exempt vs non-exempt employeesOvertime calculator

FAQ

Can salaried employees get paid overtime?

Yes, salaried non-exempt employees can and do get paid overtime. Only properly classified exempt employees are excluded.

Can a salaried employee be non-exempt?

Yes. If they don't meet both the salary threshold and the duties test, they're non-exempt and earn overtime regardless of being paid a salary.

Do managers get overtime?

Only genuinely exempt managers don't. The duties test looks at real responsibilities, supervising 2+ employees, hiring/firing input, not the title.

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