Overtime - Salaried Employees Have Wage and Hour Rights

The Fair Labor Standards Act (FLSA) is the federal law the controls the terms under which employees must be paid overtime. Every employee fall into one of two categories "Exempt" or "Non-Exempt". If an employee is non-exempt, when they reach more than 40 hours in a given work week, they have to be paid at time and a half for any additional hours. If they are non-exempt, they aren't eligible for overtime.

Most workers think that if you’re “hourly” you’re entitled to overtime pay. They also think the converse is true, if you’re “salary” you’re not entitled to overtime pay. There are exemptions to this commonly understood rule, the rule against docking pay.

Exempt (and salaried) employees who are late or who need to leave work early - due to traffic, for a doctor's appointment, taking kids to school, whatever - cannot have their pay docked for missing a couple of hours of work. If an exempt, salaried employee shows up for work, even if it's just for 15 minutes, the employee must be paid for the entire day. That’s the law.

An employer is free to discipline, fire, or demote the employee (so long as there is a legitimate business reason). But it cannot dock the employee's pay. A small caveat is that the employer is allowed to dock vacation time and force the employee to use that to cover the hours missed.

If the employer breaks this rule and docks pay then the employer has just lost the FLSA "exemption" as to that employee. In other words, the employee is now owed overtime for all hours over 4o worked in the last two (maybe three) years plus all overtime worked in the future.

If you are paid by salary and your employer docks your pay for being late or missing a few hours of work here or there, you should contact our Firm right away. Your employer is taking advantage of you and breaking the law. You may be owed a substantial amount of overtime pay.