What Makes an Employee Exempt from Overtime Pay?

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Overtime is a term that refers to the extra pay given to employees who work more than 40 hours a week, but there are some exempt employees who do not receive overtime pay. Those who do get overtime usually get time and a half. If you make $10 an hour, you’ll pay $15 for each hour that you work in overtime. The term applies only to those who work a set 40 hour week and go beyond this amount. Knowing who is exempt can help you determine if you should pay workers more.

Work Week Definition

Some workers are exempt from overtime because of the way their employers define the work week. The work week usually begins on Monday and ends on the following Sunday, but some companies may change the week to start on Sunday and end on Saturday. If an employee works Wednesday through Tuesday and puts in more than 40 hours, that worker may be exempt from overtime because part of those hours falls in a different week. Overtime only applies when an individual works more than 40 hours during the set week as defined by the employer.

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Salaried Employees

You might hear about graphic designers, IT specialists and other professionals who work more than 40 hours a week and do not receive overtime. This occurs because those individuals are salaried employees. A salaried employee is anyone who receives a set wage per pay period rather than an hourly rate. When you work in a restaurant as a waiter or cook, you’ll generally receive a check every week or every other week based on the amount of hours you worked. Restaurant managers receive the same checks but have their salaries set at the corporate level, which means that they do not receive any overtime, even if they work 50 hours or more in a week.

Certain Types of Workers

According to the Fair Labor Standards Act (FLSA), exempt employees include those who work in certain industries. Exempt from overtime benefits are those who work on a seasonal basis such as amusement park workers and employees on certain farms. Also exempt are those who work for certain telephone and newspaper companies as well as those who care for children and the elderly, including babysitters and home health care workers. Certain executives and executive assistants are also exempt from overtime rules.

Exceptions to the Rule

While the FLSA clearly defines who qualifies for overtime pay and who does not, there are some exceptions to the rule. Some jobs do not have standard overtime pay but do have a type of alternative that pays them more when they work more than 40 hours a week. This often includes those working in sales. If an employee makes 50% or more of his or her salary through commissions alone, the employer may need to create an alternative overtime package. Alternative overtime packages are often available for bus drivers and others working in public transportation as well as police officers and firefighters.

Giving workers overtime pay rewards them for working long hours and taking on extra shifts. While some people work 50 to 60 hours a week or more, not all of those individuals qualify for overtime. Exempt employees who do not receive overtime include salaried professionals and those working in certain positions and industries.