Sorry folks. That title is misleading. I did that to get your attention.
I also did it to explain a misconception.
Many employers are convinced that by electing to pay an employee a salary, they can actually eliminate their burden of overtime pay. That is flatly wrong. Wrong like “Cheech and Kong.”
Sometimes, non-exempt employees – employees who must be paid overtime – are paid salaries. They still have to get OT.
Employees are either exempt or non-exempt. Exempt employees MUST be paid salaries (with a few exceptions). Non-exempt employees CAN be paid salaries. The latter arrangement is not usually ideal for most employers, but as long as the employee makes the minimum wage or more, a non-exempt employee can legally receive a salary, but they are still due overtime of they work over 40 hours in a week (or more frequently if their state requires).
In other words, overtime is due based on the non-exemption classification, not on the method of pay. So whether you pay per-diem, piece-rate, salary, hourly, or another method of compensation to your non-exempt employee, they must still receive at least the equivalent of the minimum wage and time and one half of the regular rate of pay – overtime – for time worked over 40 hours in a week!
In short, salaried employees – if non-exempt – are entitled to overtime!
(P.S. we’ll talk about fluctuating hours some other time)
“Unless exempt, employees covered by the Act must receive overtime pay” – DOL