Do Salaried Employees Get Overtime?
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.
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.
Track hours the easy way, free
Kloqk is a free time clock that handles hours, overtime, and payroll-ready exports.
Start free