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Salaried Exempt in North Carolina

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Are salaried managers entitled to overtime under federal law in North Carolina?

Some are and some are not. Employers are frequently taken by surprise when they discover that some salaried employees are, in fact, entitled to receive overtime pay. The issue is a complex one, and involves a series of exceptions to the rule. Besides that, some states have passed their own overtime laws. In those states, employees may be entitled to overtime even if they are not covered by federal law.

The federal Fair Labor Standards Act (FLSA) requires that employers must pay employees “time-and-a-half,” or 1.5 times their regular pay, for any hours over 40 worked in a given week.

Regarding salaried employees, however, the FLSA has two categories. They are the salaried exempt and the salaried non-exempt. Salaried exempt refers to those workers who are exempt from the law. In short, they are not entitled to overtime. Salaried non-exempt, then, are employees who are entitled to overtime pay.

With those categories in place, the federal law then offers guidelines for determining which employees fall into which category. Below are some of the general guides for exempt employees (not entitled to overtime).

First, if a salaried employee earns more than $455 weekly, he or she is an exempt employee. Salaried workers making less than $455 are entitled to the overtime pay.

Second, a position’s regular job duties will also determine the category. The law exempts executives, administrative employees, professionals with advanced degrees, outside salespeople and highly compensated employees. Also exempt are creative professionals.

To define some of these positions, a professional with an advanced degree would, for example, be an emergency room doctor or a pharmacist. Creative professionals would be artists and sculptors, for example.

Highly compensated employees would be those earning more than $100,000 yearly. Administrative employees are those who exercise their own judgment in important business matters. Purchasing agents who choose vendors would be exempt. But the administrative assistant who called in the orders with those vendors would not be. Executive must direct 2 or more workers to be exempt.

Merely giving someone the title of “manager” does not automatically make that person salary exempt. JH