Can an Oklahoma employer legally pay every worker a salary, to avoid paying overtime?
No. This is covered by federal law, not state law in Oklahoma.
An employer can put all the employees on a salary, in order to make processing payroll easier. However, most employees will still be entitled to overtime pay under the Fair Labor Standards Act or FLSA.
The FLSA specifies that employees who work more than 40 hours per week are entitled to be paid 1.5 times their usual hourly rate for each hour of overtime.
An employee who is paid a salary less than $455 per week, is automatically entitled to overtime, regardless of his or her job responsibilities. (The only exceptions: this does not apply to outside sales people, teachers or employees who practice law or medicine.)
Employees with certain duties, who earn more than $455 per week, are exempt from the FLSA overtime laws. These include executives and managers who have significant decision-making responsibilities. Usually this includes the authority to hire, fire and supervise two or more other employees.
Employees exempt from overtime also include administrative, professional and outside sales employees.
Administrative employees must be office workers or perform non-manual work related to the management or general business operations. In addition, their duties must include making decisions requiring independent judgment with respect to matters that are significant to the business operations. A purchasing agent who made important decisions about which suppliers to buy from, would likely fall into this category. An administrative assistant who merely phoned in the purchasing agent’s orders, would not be exempt from overtime.
Professional employees are workers such as scientists, doctors and pharmacists, who have completed a lengthy course of specialized study in their area of expertise. Creative professionals such as inventors or artists can also be exempt from overtime.
Some highly-paid computer employees, such as computer analysts or programmers, are also excluded. In addition, highly-paid professionals who earn $100,000 or more are often exempt from the overtime laws.
It’s the job duties, NOT simply being on salary, that are the important point. A manager or computer programmer on salary is probably not entitled to overtime. A factory assembly worker on salary is still entitled to overtime, just as he or she would be if paid an hourly wage.
The federal government calls salaried workers who are entitled to overtime salaried non-exempt. They are paid by salary, but are NOT exempt from overtime.
Salaried employees who are entitled to overtime can calculate their overtime rate this way:
Weekly Salary divided by 40 x 1.5 = overtime hourly rate
If John is paid a salary of $400 per week, his hourly rate is $10 per hour. He is entitled to $15 per hour for overtime. This would apply to every hour that he works in excess of 40 hours per week.
Under the FLSA, it is illegal for most businesses to provide time off (sometimes called comp time) instead of overtime pay.
Workers in a number of occupations are always entitled to overtime, regardless of how highly paid they might be. These include police officers, firefighters, detectives and emergency responders. Carpenters, electricians, mechanics, plumbers, and others who work with their hands are also always entitled to overtime pay.
Any employee who thinks that he or she is entitled to overtime, but is not receiving it, should contact the federal Department of Labor, Wage and Hour Division, which enforces this law.
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