Overtime pay: who qualifies
Whether you live to work or work to live, there’s no arguing that the paycheck is an important part of the process. Employees want to be fairly compensated and employers want to keep good workers on the job (not to mention comply with the law), so it’s important for all to understand the rules about overtime pay. It all comes down to whether employees are considered exempt or nonexempt from overtime pay.
Fair Labor Standards Act defines who is eligible for overtime pay
In addition to requiring employers to pay a minimum wage, the Fair Labor Standards Act requires employers to pay employees time-and-a-half for worktime that exceeds 40 hours in one week. Employees who fall into one of three exception categories, however, are exempt from that rule.
Exempt vs nonexempt employees
Nonexempt employees
Nonexempt employees may be salaried or paid hourly, may earn any amount per week and may work in any field. Essentially, they are any workers who do not fall into the exempt class.
Exempt employees
Generally, exempt employees are paid to get a certain job done, not for the number of hours it takes to do it. Consequently, they enjoy more latitude with their hours and tend to earn higher pay.
Exempt employees:
- Must be salaried.
- Must earn at least $455 per week or $23,660 per year.
- Must work in one of three exemption categories.
The three exemption categories include executive, professional and administrative jobs as determined by work duties (not by title).
- Executive employees are those whose primary duty is managing the enterprise or a department of it.
- Professional employees are those whose primary duty requires advanced knowledge or education in a specific field or whose work is highly specialized. Think doctors, teachers, lawyers, computer techs and the like.
- Administrative employees are those who primarily perform office or non-manual work that relates to the general business operations and requires independent judgment and discretion over significant matters.
Wisconsin law
Wisconsin law provides a couple points of distinction from FLSA. First, overtime laws in Wisconsin do not apply to most nonprofit organizations, unless the employees work in facilities like restaurants, hotels, stores, transportation services or factories. Also in Wisconsin, overtime laws do not apply to household employees who are employed by the residents. If they’re employed by a for-profit company, like a cleaning service agency, they are not exempt.
For questions about overtime pay
Whether you’re an employee or an employer, we can help you determine whether jobs at your workplace are categorized correctly. And for more information about overtime pay, exempt and nonexempt employers, visit the U.S. Department of Labor online.
By David Pierce, La Crosse employment lawyer at Johns, Flaherty & Collins, SC. If you need a local employment law attorney, call David at 608-784-5678.