Human Resource Blog

Salary Exempt in Hawaii

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

Generally, no. For the most part, any worker making less than $455 a week, whether on wage or salary, is legally entitled to overtime pay under the Fair Labor Standards Act (FLSA).

So it is perfectly legal to put all employees on a salary. It may be convenient to do so. But that does not mean those salaried workers are automatically exempt from the protection of the overtime law. The law requires that employees working more than 40 hours weekly be legally entitled to 1.5 times their normal pay for every hour of overtime.

To calculate overtime for a salaried employee, use the following formula: weekly salary divided by 40 x 1.5 is the overtime rate.

It’s not legal simply to provide what is called “comp time,” or time off, rather than overtime pay.

If you think you are entitled to overtime pay and are not receiving it, contact the Wage and Hours Division of the U.S. Department of Labor.

The duties of a job, rather than merely the $455 weekly cutoff, determine whether or not an employee is protected by the overtime law. If you’re “exempt” from the overtime law, it means you’re exempt from its protection. If you’re “salaried non-exempt,” then it means you are under the law’s protection.

If you earn more than $455 a week and are “exempt,” you are probably a professional or an executive or manager with considerable responsibilities. Those responsibilities will include supervision, hiring, and firing. Administrative employees are exempt. Administrative employees must be performing non-manual office work related to management. They exercise independent judgment on issues important to business operations.

Professions would include scientists, doctors, or pharmacists, for example, or anyone else who engages in a long and specialized study. Creative people like artists and inventors would be professionals. High-salaried computer professionals would be in this category.

Finally, some workers are still protected – they are “salaried non-exempt” – even though they make more than $455 a week. They are entitled to overtime. They are police officers, emergency responders, firefighters, detectives, carpenters, electricians, mechanics, plumbers, and the like.  JH