HR FAQ: Do I have to pay overtime to exempt employees?

numbers-time-watch-white“It’s easier for me to have all of my employees are exempt instead of non-exempt. If they are all exempt, then I don’t have to pay overtime. Is this ok?”

No, this is not ok. Per the Fair Labor Standards Act, a position is exempt if the employee in the position regularly supervises two or more other employees and has management as the primary duty of the position and has input into the job status such as hiring, firing, and promotions of other employees. Additionally, they must have a minimum salary of $455 per week.  This minimum salary is expected to increase to $921 per week sometime this year, although the specific timeframe is unknown at this time.  The Department of Labor will provide a 60 day notice to ensure you have ample time to become compliant.

If positions are not classified accurately, companies could be fined for wage and hour violations. In fact, the government can penalize business owners for failing to pay overtime.  In addition to paying fines, business owners will also have to compensate employees for back overtime wages owed.

To avoid wage and hour violations fines and to ensure your jobs are classified accurately, contact Lisa Johnson at lisa@lisajohnsonhr.com or 918.402.2163.

Connect with Lisa on LinkedIn. 

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