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Am I Owed Overtime Pay as a Highly Compensated Employee?

You may be wondering, “Am I owed overtime pay even if I’m a highly compensated employee?”

This is an interesting question in light of how many highly-compensated executives and managers work long and strenuous hours. Let’s take some time to explore the issues involving wages for a highly compensated employee.

Am I Owed Overtime Pay?

This question is relatively easy to answer whenever we refer to employees who are deemed non-exempt from the Fair Labor Standards Act (FLSA). The FLSA requires that non-exempt workers receive overtime pay for them any time they work beyond 40 hours per week.

Does this same legal standard apply to salaried employees? It depends on whether their work meets the strict legal conditions for exemption from the FLSA, and thus they do not receive overtime pay. Many salaried positions are exempt, but many salaried employees are legally owed overtime.  So, let’s review the legal standard for salaried overtime pay for a better understanding of these legal requirements.

FLSA Criteria for Exemption

Employees that are exempt from the FLSA must meet these conditions.

  • They work for a salary. In contrast to hourly employees, there’s no additional compensation when they exceed a 40-hour work week.
  • The Department of Labor threshold, as of 2022, is an annual salary level of $35,568, or $684 per week. If your employer pays you a lesser salary and an employer forces you to work overtime without additional pay, you have the right to make a wage claim.
  • Jobs that fit the criteria for exemption include management, professional work, executives, and some creative work. This includes accountants, managers, executives, supervisors, and so forth. In order to be classified as a supervisor/manager, you would have to supervise at least the equivalent of two direct reports, on a full-time basis.
  • Exempt employees perform generally non-physical tasks, typically within an office environment.
  • Classification as a “highly compensated exempt employee” requires the employee to meet a minimum yearly salary level of $107,432 and perform basic professional, executive, or administrative work.

Other Issues for a Highly Compensated Employee

Although many highly paid, salaried workers may not meet the requirements for overtime pay, there are other important pay issues these employees may encounter. A common example is the severance agreement. Highly-paid employees often receive severance agreements when they leave their jobs. Many employers attempt to reduce their legal risk with highly compensated employees by offering severance pay in exchange for the employees waiving all employment-related claims the employees may have.  Such employees must carefully review such agreements and often seek legal counsel to obtain the maximum severance pay available to them.

Employees who are interested in learning more about severance packages can read this article before signing a contract with a severance package.

Overtime Pay as a Highly Compensated Employee: Strong Legal Advocacy in Wage Disputes

Rowdy Meeks Legal Group LLC assists employees in understanding and exercising their legal rights in the workplace. Whether you’re a CEO, middle manager, line hourly worker, or contract worker, we can help you handle wage disagreements with employers.

If you believe that you’re owed overtime pay but haven’t received it, we encourage you to contact us for a free consultation.