Laws regarding the wages and work hours salaried employees receive comply with regulations set forth in the Department of Labor’s Fair Labor Standards Act, or FLSA. The laws outline minimum wages, overtime and paycheck deductions that salaried employees must receive. Salaried workers receive protection under federal and state law regardless if they work on a part-time or full-time basis.
Administrators, Professionals and Executives
Senior workers at organizations typically earn higher annual wages because they make independent decisions that impact the financial health of the organizations they work for. Unlike administrators and executives, professionals generally have an advanced skill set reflected by their level of education. Some states require them to have postsecondary degrees, licenses and certifications. For example, attorneys and doctors are professional workers; administrators are human resource managers and accountants; and executive positions are Chief Executive Officers and Chief Financial Officers, amongst others. FLSA guidelines state that these salaried employees are exempt from receiving overtime.
Exempt salaried employees must receive at least $455 a week and typically do not receive standard hourly wages. Under the FLSA, laws mandate that salaried employees who do not meet the criteria for categorization as administrators, professionals or executives, receive an hourly minimum wage. At the time of publication, the federal minimum wage rate is $7.25 an hour. Employers must adhere to both federal and state labor laws and pay non-exempt workers the higher of the two minimum wage rates. For example, if an employer lives in a state where the minimum wage rate is $8.00 an hour, they must pay their employees at the $8.00 rate rather than the federal rate of $7.25 an hour.
Although exempt salaried employees do not have to receive overtime, non-exempt employees must receive payment for all time they work above 40 hours a week. The overtime pay non-exempt employees receive is one and one half times their standard hourly wages. Therefore, employees with $50 in standard hourly wages must receive $75 for each hour in excess of 40 hours a week. Federal laws do not require employers to pay non-exempt salaried employees overtime when they work above a certain number of hours a day. However, some private employers do pay non-exempt employees at the one and one half rate after they work more than eight or nine hours a day. Some state laws also require non-exempt salaried employees to receive overtime after they work a certain number of hours a day.
Employers are prohibited from deducting wages from exempt employees’ paychecks because the employees worked less than a full day. Even if there is insufficient work for exempt employees to perform, they must receive a full day’s wages when they show up for work or if they only stay at the office for half a day.