©2024 OnPay, Inc.
Insurance offered through OnPay Insurance Agency, LLC (CA License #0L29422)
Updated on April 15, 2024
A salaried employee receives a fixed, predetermined amount of pay for performing their work duties, which is usually paid on a weekly, biweekly, or semimonthly basis, though some (higher earning) salaried employees are paid monthly. Most salaried employees are exempt from overtime pay regulations. As a result, they normally do not receive extra pay for working more than 40 hours in a week.
A salaried employee, also known as a salaried worker, is paid a fixed amount per payroll cycle. This amount is typically established as an annual salary (e.g., $70,000 per year) at the time of hiring or during the performance review process. This annual amount is then divided into equal payments to be made according to the employee’s pay frequency (e.g., biweekly or semimonthly).
Most salaried employees are excluded from minimum wage and overtime pay under the Fair Labor Standards Act (FLSA). These salaried employees are referred to as “exempt.” Also known as white-collar employees, exempt employees typically work in executive, administrative, and professional roles.
Conversely, an hourly employee is paid based on their agreed-upon hourly rate, not a fixed sum. Unlike most salaried employees, most hourly employees are not excluded from the FLSA’s minimum wage and overtime pay regulations. As a result, they are termed “nonexempt.”
Although most salaried employees are exempt, a salaried employee can be nonexempt. In the latter case, they are eligible for both minimum wage and overtime pay. Therefore, it’s important to properly examine the FLSA’s rules before classifying a salaried employee as exempt or nonexempt.
An employee is salaried exempt if they perform the required FLSA job duties plus earn at least the minimum salary requirement of $684 per week.
In addition:
An employee is salaried nonexempt if they do not fulfill the FLSA job duties test, even though they earn a salary. For example, a salaried administrative worker who does not perform the administrative duties outlined in the FLSA is nonexempt. The fact that they are nonexempt makes them eligible for minimum wage and overtime under the FLSA.
In addition:
Along with reviewing the FLSA, its important to check state laws for any salary-related legislation.
Here are some things to keep in mind:
Generally, if a salaried employee is subject to both the FLSA and state wage and hour laws, the employer should utilize the law that is most beneficial to the employee.
“Instead of automatically classifying a salaried employee as exempt, we first analyze the FLSA’s criteria for the position. We also check for any state requirements.”
Terms related to: Salaried employee
Articles and resources related to: Salaried employee
Try OnPay out yourself to see how easy payroll and HR can be. To get started, just share a few basic details about your business. Our team of pros will set everything up and import your employees’ information for you.