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Should employers pay salaried individuals overtime?

Traditionally, one of the perks of becoming a salaried individual in the workplace is that your hours aren't counted quite so closely. While salaried individuals are still responsible for working as required -- and getting the job done completely and correctly -- they often have more flexibility when it comes to time off or making up time they had to take off. But that flexibility comes with a price for many.

For years, individuals who moved from a high-level production job into a low-level supervisory job took a pay cut. The move was a promotion, but because the supervisory job was salaried, the individual no longer received overtime. Depending on how much overtime the person worked before the promotion -- and how much they were paid per hour -- the new salary might be less than what that person earned on average previously.

That fact has created a misunderstanding for many employees. They believe that a salary job automatically exempts you from overtime pay, but that isn't true. The exemption applies after you reach a certain amount of pay depending on the type of job you have, and as of Dec. 2016, the exemption cutoff is being raised quite a bit.

Updates from the Department of Labor to federal overtime rules raise the standard salary level to $913 per week for exemptions and $134,004 per year for highly compensated employees that pass a minimal duties test. What does this mean for workers? It means employers will have to restructure how they manage and pay some salaried individuals -- and you might have to keep better track of your hours next year to know whether you are eligible for overtime. If you suspect you are not being paid overtime that you deserve, consider speaking with an employment law professional to understand your rights and options.

Source: United States Department of Labor, "Final Rule: Overtime," accessed May 19, 2016

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