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Salary Exempt in Alaska

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Can an Alaska employer legally pay every worker a salary, to avoid paying overtime?

It doesn’t work that way. Many salaried employees are still under the protection of the Fair Labor Standards Act, otherwise known as the FLSA. So employers may put everyone on salary. But that doesn’t mean everyone will automatically be “exempt,” or no longer under protected by the overtime law.

Two major factors control whether a salaried employee is entitled to overtime. They are job duties and pay level. Simply being classified as salaried is irrelevant.

First, pay. If a worker makes a salary of less than $455 weekly, that worker is automatically entitled to receive overtime. It does not matter what the responsibilities of his or her job is. There are exceptions. They include outside sales people, teachers, and workers who practice medicine or law.

For those who earn more than $455 a week:

Some of them are still always entitled to overtime. They include police, firefighters, and detectives. They include emergency responders. And they also include carpenters, plumbers, mechanics, electricians, and others who work with their hand.

If an employee makes more than $455 a week and has certain kinds of duties, he or she is “exempt,” meaning not legally entitled to overtime. This is a position that either requires extensive, highly specialized training (doctors, pharmacists, and scientists, for example), or people in important decision-making roles. Executives and managers fall within this category. Their jobs usually include supervision and the power to hire and fire.

Professionals are exempt. They are the scientists, doctors, and the like, as well as creative professionals such as inventors and artists. Computer programmers who are highly paid may also be exempt.

This law is enforced by the U.S. Labor Department’s Wage and Hour Division.

Remember also that it’s not legal to provide “comp time,” or compensatory time off, instead of overtime pay, to people who are entitled to overtime pay.

Workers who qualify for overtime are entitled to 1.5 times their normal hourly rate for any hours over 40. To calculate overtime for salaried workers, divide the weekly salary by 40 and multiply by 1.5.  JH