Can I be paid overtime if I receive a salary?
The answer to that question depends on whether or not you are classified as exempt. Exempt employees are not entitled to overtime. This category includes many managers, executives, professionals, such as accountants or lawyers. Usually there is a minimum salary that you must make more than. There are also other categories of employees who are considered exempt, including teachers, computer employees, and employees who are engaged in sales that take place outside the company’s main place of business. Your employer should tell you when you start if you will be considered exempt or not.
If you are told that you are exempt but you don’t feel as though you fit into any exempt category, you could bring a lawsuit based on the misclassification. An example of this is retail managers. There have been many lawsuits brought by retail managers, with some success, arguing that they are not truly exempt employees. To be exempt because you are a manager, you must have a certain level of control. You also must not spend more than 20% of your time doing things that are not related to your job as a manager, such as stocking shelves or ringing up customers on cash registers.
If you are not considered exempt, you are entitled to overtime. The way this is calculated for hourly employees is by paying them one and a half times their hourly rate for every hour work over forty hours per week. Example: Bob makes $10 per hour. His overtime wage would be $15 per hour. If Bob works 50 hours in one week, he will be paid $550, or $400 which is forty hours at his regular rate and $150 for his ten hours of overtime.
The calculation for salaried employees is a little different. The law states that overtime can be calculated in any way that the employer and the employee agree, but there are two ways that are usually used, one that is similar to the way overtime is calculated for hourly employees and the fluctuating workweek. We will explain the fluctuating work week here, but readers should note that recent court decisions have made it highly doubtful that this method of calculating overtime is lawful in Pennsylvania.
The standard way of calculating overtime works pretty much the same as an hourly employee. Example: Jan’s salary is $1000 per week. To calculate her overtime, you take her weekly salary and divide by forty, which in this example equals $25. If Jan works 50 hours, she is entitled to $1375, or $1000 for the forty hours worked, and $375 for the ten overtime hours (25*1.5= 37.50).
The fluctuating workweek is expressly authorized by the Fair Labor Standards Act, but most courts have found recently that it violates the Pennsylvania Minimum Wage Act. In this method, an employee’s hourly wage is calculating by dividing his or her salary by the total number of hours worked, and then adding half of that amount to each hour of overtime worked. Example: Chris is paid $1000 per week. He works fifty hours in one week. His hourly rate is $20 per hour. Chris will get paid $1100, $1000 for the first forty hours worked, plus $10 for every hour worked over fifty.