FAQ: Can salary workers get overtime? Everything Employers Must Know

Salaried employees and overtime—it sounds like a contradiction, right? You pay someone a fixed annual salary, so surely that means no overtime pay… or does it? Spoiler: it depends. The truth is, many salaried workers can be eligible for overtime pay, depending on their job duties, hours worked, and how their salary is structured. In this blog, we’re breaking down what the federal overtime law actually says, where employers tend to trip up, and how you can stay compliant without losing sleep—or money.

Current federal overtime rules for salaried employees

Here’s what’s going on at the federal level right now—no fluff, just facts.

What's the current salary threshold in 2025?

To be classified as exempt from overtime, an employee must earn at least $684 per week or $35,568 per year. This is the minimum salary threshold set by the Fair Labor Standards Act. Anyone earning less than that is automatically considered non exempt, no matter their job title—and that means they’re eligible for overtime pay if they work more than 40 hours per week.

This salary threshold is a big deal for employers, especially those managing a mix of hourly and salaried employees. If you’ve got staff on the edge of that line—earning just over or under—it’s time to double-check their exemption status.

Why it matters:

• Employees below the threshold must receive overtime pay for any extra hours worked beyond regular business hours.
• Misclassifying a salaried position as exempt can lead to serious trouble with labor laws.

Key changes from recent legal challenges

In late 2024, there was a push to increase the minimum salary threshold, but federal courts put a stop to it. Proposed rules aiming to raise the threshold to around $55,000 annually were blocked, leaving the current threshold unchanged—for now.

👉 So what does that mean for you? In short:

• The threshold remains at $35,568.
• You still need to classify salaried employees based on current law.
• No need (yet) to adjust salaried positions that sit just above the old threshold.

But keep an eye on this—overtime rules can shift fast, and if you manage hourly workers, salaried workers, or anyone in between, these legal updates can impact your pay period and overtime payments overnight.

So can salary employees get overtime? ( Direct answer)

Yes—salaried employees can get overtime, but only if they meet certain criteria under federal overtime law. Just because someone is paid a salary doesn’t mean they’re automatically exempt from overtime pay. In fact, many salaried employees are still entitled to overtime pay depending on how much they earn and what kind of job duties they perform.

The key factors that determine overtime eligibility are:

• Whether the employee meets the minimum salary threshold.
• Whether their primary duty passes the duties test.
• Whether they’re classified as exempt employees or non exempt employees under the Fair Labor Standards Act (FLSA).

So yes, salaried workers can receive overtime compensation, and if you’re an employer, getting this wrong can mean back pay, penalties, and even lawsuits. Let’s break it down further.

How job duties affect overtime eligibility

Spoiler: job titles mean very little when it comes to overtime law.

Exempt vs. non-exempt duties – What’s the difference?

Under the Fair Labor Standards Act, employees aren’t just classified by their annual salary, but also by the job duties they perform. This is where the duties test and salary basis test come into play.

Here’s a quick breakdown of exempt employees:

• Executive: Manages other employees, has hiring/firing power, and regularly supervises at least two full-time staff.
• Administrative: Performs office or non-manual work related to business operations, with discretion and independent judgment.
• Professional: Requires advanced knowledge in a field of science or learning (think lawyers, engineers, etc.).
• Computer-related and outside sales roles also have specific exemptions.

If your employee doesn’t meet both the salary test and the duties test, they’re non exempt, even if they’re on a full salary.

Common mistakes employers make with job classifications

Getting the exemption status wrong isn’t just a paperwork issue—it can cost you. Common missteps include:

• Assuming all full time employees on salaried positions are exempt.
• Giving an employee a fancy title like “manager” when they don’t actually manage anyone.
• Ignoring the fact that someone’s primary duty is the same as their hourly counterparts.

⚠️ To stay compliant:

• Review actual job duties, not just titles.
• Compare roles with FLSA guidelines.

State-specific overtime regulations employers need to know

Federal overtime law sets the base—but some states go above and beyond with different overtime rules.

States with higher salary thresholds than federal requirements

If you’ve got employees in California, New York, or Washington, pay close attention. These states have set their own minimum salary thresholds that are higher than the federal level.

Here’s a quick look:

So if you're operating in one of these states and you’re only following federal law, you could already be underpaying your salaried workers. That includes not paying overtime when it’s legally required.

Managing compliance across multiple states

If your business spans several states, things get messy fast. Why? Because hourly and salaried employees in one state might have completely different overtime rules than those in another.

To stay sane (and compliant), here’s what we recommend:

• Keep track of state-specific labor laws for overtime eligibility and salary thresholds.
• Use a central system to document hours worked, pay period details, and overtime payments.
• Choose software that lets you customise settings by location—because weekend work in Texas might be treated differently than in New York.

💡Pro tip: Assign someone on your team (or hire externally) to manage compliance. It’s way cheaper than getting fined or sued for not paying mandatory overtime.

Situations requiring overtime for salaried employees

Let’s say a salaried employee works through the weekend on a last-minute project or picks up extra hours during an emergency. If they’re classified as non exempt, those overtime hours must be paid—regardless of the situation.

Here are some examples where salaried workers are still entitled to overtime:

• Working beyond 40 hours per week due to staff shortages or seasonal peaks.
• Responding to out-of-hours issues (looking at you, IT and facilities teams).
• Covering sick colleagues or handling crisis situations.
• Being scheduled outside regular business hours, especially if it’s not part of their primary duty.

Federal overtime law doesn’t give a pass for “just this once.” If a non exempt worker goes over their scheduled hours worked, overtime compensation applies.

Overtime during remote work and flexible schedules

Working from home doesn’t mean the rules disappear. Salaried employees on remote work or flexible schedules can still rack up overtime hours, especially when boundaries between work and home blur.

Here’s what matters:

• All hours worked count, even if done in chunks outside standard hours.
• Employees must be paid for overtime if they go over 40 hours in a given workweek.
• Employers must track total hours—not just assume people are sticking to a fixed schedule.

Remote or not, if your non exempt employees are putting in additional compensation-worthy time, they’re eligible for overtime pay. And yes, even answering emails at 9 PM can count.

Employee scheduling and Time-tracking software!

• Easy Employee scheduling
• Clear time-tracking
• Simple absence management

Try for free Request a demo

Risks and penalties of not paying salaried workers overtime correctly

Getting this wrong isn’t just a slap on the wrist. It can cost you big.

Failing to pay overtime pay when required can lead to:

• Back pay owed for unpaid overtime payments (sometimes for multiple years).
• Fines from the Department of Labor under federal law.
• Lawsuits from current or former employees, often with the help of an employment lawyer.
• Damaged reputation and employee trust—especially when dealing with mandatory overtime or unpaid weekend work.

If you’ve misclassified someone or overlooked overtime eligibility, courts may also award double the unpaid wages. So yes, it adds up fast.

Best practices for tracking overtime for salaried workers

If you’re thinking, “OK, but how do I track overtime for salaried employees without losing my mind?”—you’re not alone.

Start by creating clear expectations around hours. Even for salaried positions, tracking time is essential if the role isn’t exempt.

✅ What helps:

• Require daily time logging for hours worked.
• Encourage employees to flag any extra hours immediately.
• Set up automatic alerts when employees hit their 40-hour mark.

Also, be clear about the pay period, so there’s no confusion about when overtime compensation kicks in. Even with sick days or holiday pay, make sure total hours are counted correctly.

Recommended tools and software for simplifying overtime management

Manual tracking is a one-way ticket to errors. Instead, use tools built for this job. Some solid picks for overtime management:

• Shiftbase – Great for handling hourly and salaried employees, customisable by role and location.
• TSheets by QuickBooks – Syncs well with payroll, good for small teams.
• Clockify – Simple and free for basic time tracking.

These tools make it easy to track overtime hours, automate pay overtime rules, and generate reports during audits. Plus, they reduce the risk of paying someone the wrong hourly rate or misclassifying non exempt employees.