Salaried but not exempt: when a salary still means overtime

The myth: "salaried means no overtime"

Federal law allows employers to pay non-exempt workers a salary. When they do, the salary simply sets the regular rate, and overtime is still owed for hours over 40. Exemption depends on meeting the salary level, salary basis and duties tests. Plenty of salaried workers in retail management, call centers, IT support, insurance claims, healthcare coordination, and restaurant and hospitality supervision turn out to be non-exempt.

Common misclassification patterns

• The working manager: a store, shift or kitchen "manager" whose main job is serving customers, stocking or cooking.
• The title upgrade: a role renamed "analyst" or "specialist" with no real independent decision-making.
• The help desk: computer support workers who troubleshoot and follow procedures rather than design or develop systems.
• Below-threshold salaries: especially in states with higher minimums, such as California and Washington.

How back pay is figured

When a salaried worker is found non-exempt, courts don't all calculate the regular rate the same way. Two common approaches:

• Salary covers 40 hours: the regular rate is the weekly salary divided by 40, and overtime hours are owed at 1.5 times that rate.
• "Half-time" or fluctuating workweek: the regular rate is the weekly salary divided by all hours worked, and only the extra half is owed for overtime hours. This produces a smaller number and is limited by specific legal conditions.

Our calculator shows both as a range so you can see the possibilities.

What to gather

• Offer letter, job description and any reclassification notices
• Pay stubs, W-2s and any bonus records
• Your own record of hours: calendar entries, emails, badge or login times, texts
• Notes describing what you actually do in a typical day and week

See how to track your hours and how to file a wage claim.