Salaried Employees and Overtime:
What Your Employer May Not Have Told You
Being paid a salary does not automatically mean you are exempt from overtime. Millions of salaried workers are misclassified every year. If your job duties don't meet the legal standard for exemption, you may be owed back wages for every overtime hour you worked.
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Quick Facts About Salaried Workers
As of January 1, 2026, the federal standard to meet the overtime exemption is $684 per week ($35,568 per year). Workers earning below this amount are generally entitled to overtime regardless of their job title.
Many states have set higher thresholds: California requires $1,352/week, Washington requires $1,541.70/week, and New York City requires $1,275/week.
Earning above the threshold does not automatically exempt you, your actual job duties must also meet strict legal criteria. Just because your job says you're exempt doesn't mean you are.
Job titles like "Manager," "Supervisor," or "Senior Associate" do not determine exemption status. What you actually do at work every day, does.
The lookback period for unpaid overtime claims is generally two years, or three years if the violation was intentional.
Do Salaried Employees Qualify For Overtime?
Yes, and without knowing it, many do. This is one of the most misunderstood areas of wage law. A common assumption is that salaried workers are not entitled to overtime. That is not what the law says.
The Fair Labor Standards Act requires overtime pay for most employees who work more than 40 hours in a workweek. The exemptions are specific and narrow. To qualify as exempt, an employee must pass two separate tests, a salary test and a duties test. Both must be met. If either one fails, the employee is entitled to overtime.
Many employers apply the exemption broadly, assuming that any salaried worker above a certain pay level is exempt. That assumption is often wrong, and the worker always gets shorted in those cases.
The Salary Threshold Test
The first test is straightforward and obvious. If you are paid less than what the FLSA says for a salaried, exempt employee, you are entitled to overtime. Your job title and duties do not matter at that point. It does not matter what your employer says. If you don't meet the requirement, you are owed overtime.
The federal threshold is $684 per week, or $35,568 per year. Several states have set higher minimums. If you are in one of those states or jurisdictions, the federal amount no longer applies, and state law trumps it. In California, the threshold is $1,352 per week. In Washington state, it is $1,541.70 per week. In New York City, it is $1,275 per week.
If your salary falls below the threshold that applies in your state, your employer was required to pay you overtime for every hour you worked past 40 in a workweek, regardless of how they classified you. It also doesn't matter if your job offer says different or if you singed a contract that says you are agreeing to not being paid overtime.
The Duties Test
If you are paid more than the what the salary minimum is not enough to make a worker exempt. The second test looks at what the worker actually does every day. Federal law recognizes three categories of exempt employees: executive, administrative, and professional.
Executive Exemption: This one comes down to real authority. A true exempt manager runs the business or a specific department. They direct at least two full-time employees and have actual power over who gets hired, fired, or promoted. Suggesting a name to HR does not count. Making the call does.
Administrative Exemption: This exemption is about decision-making power, not job function. The work has to connect directly to how the company operates. And the person doing it has to make real, independent decisions on things that matter. Filling out forms, following a checklist, or processing routine requests does not qualify.
Professional Exemption: This one applies to fields that require a high level of formal education or specialized training. Think doctors, lawyers, engineers, accountants, and scientists. If the job can be learned on the job without a degree or years of formal study, it likely does not meet this standard.
Most people who read those three descriptions realize pretty quickly that their job does not fit any of them. If that is where you landed, your employer may not have had the legal right to classify you as exempt in the first place.
How Is Overtime Calculated For Salaried Workers?
Here is something most salaried workers never think to check. When a salaried worker is entitled to overtime, the math is straightforward. Take the weekly salary and divide it by 40 hours. That gives you the regular rate. Overtime is then paid at one and a half times that rate for every hour that you worked over 40 in a week.
Try the math with a real number:
Say a salaried employee earns $900 per week and works 52 hours.
Step 1: Regular rate - $900 ÷ 40 hours = $22.50/hour
Step 2: Overtime rate - $22.50 × 1.5 = $33.75/hour
Step 3: Overtime hours - 52 − 40 = 12 overtime hours that week
Step 4: Overtime owed - 12 × $33.75 = $405 for that week alone
Now multiply that by two years of consistent overtime. The total unpaid amount exceeds $42,000. That is before any additional damages the law may allow.
What This Means In Real Life
Think about the last two years at your job. How many weeks did you work past 40 hours? How many times did you stay late, skip lunch, or take work home on a weekend? You accepted your salary and kept going, because that is what salaried workers do.
What most people in this situation do not know is that every one of those extra hours may have been legally required to be paid. The salary did not cover them. The exemption may not have applied. And the amount that should have been in your paycheck kept growing, week after week, while your employer kept the difference.
Types of Unpaid Wage Claims We Handle
We handle the full spectrum of wage and hour violations under federal and state law, with particular expertise in:
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Employee Misclassification
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Expense Reimbursement
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Untimely Wage Payment
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Meal and Rest Break Violations
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Employer Tip Theft
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Minimum Wage Violations
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Off-the-clock Work
Common Ways Salaried Employees Are Misclassified
- Title Without Authority: An employer assigns a title like "Manager" or "Supervisor" but the worker has no real authority to hire, fire, or make personnel decisions. They spend most of their time doing the same work as the people they nominally oversee. The title does not create an exemption. The actual duties do.
- Reclassification Without Proper Pay: Recent increases to salary thresholds required many employers to reclassify salaried workers as hourly. Some employers made the change on paper but did not begin tracking hours or paying overtime. If your status was changed to hourly but your employer still expects you to work extra hours without additional pay, that is a violation.
- Above-Threshold Assumption: Some employers assume that any employee earning above the salary threshold is automatically exempt. That is not how the law works. The duties test must also be met. Paying a high salary does not eliminate the overtime obligation if the worker's actual duties are non-exempt.
Ready To Get Started?
Call 888-992-2990 or contact us online by clicking the button below to request a free consultation with one of our team members. Hablamos español.
MICHAEL JOSEPHSON
ANDREW DUNLAP
RICHARD SCHREIBER
OLIVIA BEALE
ALYSSA WHITE
JULIA CLINE
SCOTT STOTTLEMYRE
Unpaid overtime Lawyers Fighting for Workers Nationwide
With more than two decades of experience, our unpaid wage attorneys have helped workers throughout the U.S. stand up to employers who would seek to cheat them out of fair wages.
Josephson Dunlap handles unpaid wage and overtime cases for workers across every pay structure, including:
We handle claims involving a wide range of violations, including:
- Employee Misclassification
- Meal & Rest Break Violations
- Delayed or Untimely Wages
- Off-the-Clock Work
Josephson Dunlap handles these cases exclusively. That focus means we know this area of law in detail and have the staff and resources to pursue claims of any size. Whether its an individual worker or a nationwide class action, we have the expertise to recover what is rightfully owed. We have helped more than 100,000 workers recover wages across all 50 states.
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Frequently Asked Questions About Unpaid Overtime
Not necessarily. The label in your contract does not decide if you are owed overtime or not. What matters is how you actually work. Does the company set your schedule? Do you use their equipment? Do you work under a supervisor? If the answer is yes, the law may classify you as an employee, no matter what your contract says.
In most cases, two years. If your employer knew they were breaking the law and did it anyway, that can extends to three years. Some states allow even longer. The clock runs from the date of each violation, so the sooner you act, the more you can recover.
Anything you have helps move your case forward. If you have pay stubs, time records, schedules, emails, or contracts. If you don't have much, that's okay. Josephson Dunlap can work with what's available. Missing records do not prevent you from filing.
The review and finding out how much you could be owed is free. Josephson Dunlap works on contingency you pay nothing unless wages are recovered.
Yes. Certain bonuses must be included when calculating your regular rate of pay. If your employer paid you a bonus but did not adjust your overtime rate, your overtime was likely calculated incorrectly for those weeks.
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