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 - Is it true that since I pay my employees on a salary basis, I don’t need to be concerned about overtime?

 -  NO!!!  Let me repeat, NO, absolutely not. Just paying an employee a salary does not exempt them from overtime. 

The Fair Labor Standards Act (“FLSA”) requires that non-exempt employees must be paid overtime at time and half for all hours worked over 40 in a workweek unless the employee specifically meets an exemption from the overtime provisions and is paid a salary of at least $455.00 per week. (an amount which will be raised in the near future - see article regarding Department of Labor OT regulations.

 

There are many exemptions to the FLSA overtime requirement, but the four main exemptions are the administrative exemption, the executive exemption, outside sales exemption, and the learned professional exemption.  For more information on FLSA exemptions - see article regarding FLSA exemptions. Depending on your industry, an employee could fit into another exemption, which due to space constraints I will not go into here.  

All employers should review the duties of each job, draft a job description and make sure that employees are being paid in accordance with the FLSA. In recent years this has been the largest area of litigation for employers and it is growing.  It is also highly recommended to work in conjunction with your employment law counsel to ensure your internal audit is confidential and comports with the FLSA and that all applicable exemptions are being utilized correctly.

Should you have any questions regarding wage and hour issues, please feel free to contact me at 216-447-1551.