Compliance Watch:

What are my rights as a salaried employee in the US?

A salaried employee in the United States is an individual who receives a fixed compensation on a regular basis, often weekly, bi-weekly, or monthly, regardless of the actual number of hours worked. This predetermined salary is typically not affected by variations in the quantity or quality of work performed within a given pay period. Salaried employees are commonly employed in professional, managerial, administrative, and executive roles. Unlike hourly workers who earn wages based on the hours they work, salaried employees’ income remains consistent, reflecting their role’s intrinsic value and responsibilities.

Among the key rights that salaried employees in the US are that they possess the entitlement to:

• Be shielded from harassment or discrimination (treated unfairly) on the grounds of race, color, religion, sex (including pregnancy, sexual orientation, gender identity), national origin, disability, age (40 or older), or genetic information (including family medical history).
• Receive equitable compensation for identical tasks.
• Obtain reasonable adjustments (modifications to regular work procedures) essential due to medical conditions or religious beliefs, if mandated by law.
• Anticipate confidentiality for any medical or genetic details disclosed to their employer.
• Report discrimination, participate in discrimination inquiries or legal actions, or stand against discrimination (such as expressing intent to file a discrimination complaint), free from retaliation (penalties) as a consequence.

These rights are established by federal employment discrimination regulations. Your business may also be subject to other federal, state, or local laws. Additional information about these laws could be available on government websites at the federal, state, and local levels.

Yes. In many ways, overtime pay can be applicable to salaried employees. The Fair Labor Standards Act (FLSA) considers certain employees as non-eligible for overtime (exempt) and others as eligible (non-exempt).

Employees might qualify as exempt from FLSA’s overtime provisions after considering three specific criteria:

1. Salary Basis Test: These employees receive a fixed salary instead of variable hourly wages based on their schedule.
2. Salary Test: Exempt employees meet a predetermined income threshold, which serves as a baseline salary requirement. This threshold was raised to $35,568 in 2020, although some states have set their own higher thresholds (excluding Georgia).
3. Duties Test: Exemption hinges on the nature of an employee’s primary tasks, which must involve executive, administrative, or professional responsibilities—typically associated with white-collar roles. This distinction elucidates why blue-collar workers, often engaged in manual labor, can still be eligible for overtime even if their compensation is substantial.

It’s worth mentioning that within the framework of FLSA regulations, hourly employees are typically entitled to overtime pay, which translates to at least one and a half times their regular rate for hours worked beyond the customary 40-hour workweek. These employees are categorized as non-exempt. 

The FLSA, introduced by the U.S. Department of Labor as a component of the New Deal during the 1930s, was established to establish boundaries in the realm of work during a period marked by employer exploitation. In an effort to safeguard workers and create a distinction between work and leisure for Americans, FLSA introduced a 40-hour workweek, minimum wage standards, restrictions on child labor, and provisions for overtime compensation.

Yes, the FLSA defines certain deductions that are allowed and those that are prohibited. As a standard practice, if an exempt employee engages in any work during the workweek, they should receive their complete salary amount. An employer is prohibited from making deductions from the salary of an exempt employee due to absences stemming from the employer’s actions or business operational necessities. When an exempt employee is prepared, able, and willing to work, deductions cannot be made from their salary in situations where no work is available.

1. Allowable deductions from pay include:

• Absences for personal reasons not related to sickness or disability for one or more full days.
• Absences due to sickness or disability, following a genuine compensation plan or policy.
• Offsetting jury or witness fees, as well as temporary military duty pay.
• Penalties for significant safety rule violations, imposed in good faith.
• Disciplinary suspensions of one or more full days for legitimate workplace conduct rule violations.
• Instances when an employee doesn’t work a full week during their initial or terminal employment week.
• Unpaid leave under the Federal Family and Medical Leave Act.
• Deductions for exempt public agency employees due to budget-required furloughs, with special regulations for partial-day or hourly absences not covered by accrued leave.

2. Non-allowable deductions from pay include:

• Deducting a day’s pay due to the employer’s closure in adverse weather conditions.
• Subtracting three days’ pay due to an exempt employee’s absence for jury duty.
• Deducting pay for a two-day absence prompted by minor illness when the employer lacks a legitimate sick leave plan.
• Deducting for a partial day’s absence for attending a parent-teacher conference.
• Deductions for partial-day absences, except in cases of an exempt employee’s first or last week of employment or for unpaid leave as per the Family and Medical Leave Act.

Federal regulations, generally in the US, do not mandate lunch or coffee breaks. Nevertheless, in cases where employers provide short breaks (usually ranging from 5 to 20 minutes), these breaks are regarded as work hours that contribute to the overall hours worked during the workweek. This consideration affects the determination of potential overtime hours. Unauthorized extensions of authorized work breaks do not need to be counted as work hours if the employer has explicitly and clearly informed the employee that the designated break should only last for a specific duration, and any extension is against company policy and will result in consequences.

In contrast, meal periods (typically lasting at least 30 minutes) serve a distinct purpose from coffee or snack breaks and are therefore not considered work time and are not eligible for compensation.

It’s worth noting that regulations regarding meal and rest breaks are applicable exclusively to on-exempt employees, exempt employees, who fall outside the scope of the Fair Labor Standards Act.

A flexible work schedule offers an alternative to the conventional 9 to 5, 40-hour work week by permitting employees to adjust their start and/or end times. In certain policies, employees are required to complete a set number of hours per pay period and be present during designated “core time” each day. The Fair Labor Standards Act (FLSA) does not specifically regulate flexible work schedules. Such arrangements, including alternative work options, are established through mutual agreement between the employer and the employee (or the employee’s representative).

Exempt status indicates that an employee is exempt from receiving overtime pay under the Fair Labor Standards Act (FLSA). This status is typically granted to executive, administrative, professional, and certain other roles that meet specific criteria. It implies that an employee’s job duties, responsibilities, and level of authority align with the requirements outlined by the FLSA.

Download U.S. FLSA Exemption Salary Threshold 2024 Poster now.

The differences between exempt and non-exempt salaried employees extend beyond overtime eligibility. Exempt employees often hold higher-level positions and are expected to exercise independent judgment and decision-making. They receive a fixed salary regardless of hours worked, while non-exempt employees are entitled to overtime pay for any hours worked beyond the standard 40-hour workweek.

Determining your exempt or non-exempt status involves evaluating factors such as your job responsibilities, level of autonomy, and industry regulations. Consulting the U.S. Department of Labor’s guidelines and seeking guidance from your HR department can help clarify your status, ensuring that you are aware of your entitlements and obligations as a salaried employee.

It’s important to understand the minimum wage requirements set for salaried employees. These regulations stipulate the lowest hourly rate that a salaried employee’s earnings must effectively equate to, ensuring their compensation meets or exceeds the mandated threshold. As of July 24, 2009, the federal minimum wage for most salaried employees in the US is $7.25 per hour. However, some states have their own minimum wage laws that exceed this federal rate.

Download U.S. Minimum Wage 2024 Poster now.

Exempt salaried employees, who meet specific criteria related to job duties and salary, are generally not entitled to overtime pay. Non-exempt salaried employees, on the other hand, are eligible for overtime pay if they work more than 40 hours in a workweek. The overtime rate for non-exempt salaried employees is typically 1.5 times their regular hourly rate for every hour worked beyond 40 in a workweek.

The fluctuating workweek approach is employed for nonexempt employees, providing a consistent weekly salary regardless of their hours worked, coupled with additional overtime compensation when their workweek exceeds 40 hours. The employee’s weekly salary remains constant regardless of the different hours they may work. If their workweek surpasses 40 hours, they receive extra overtime pay for each hour beyond this threshold.

This method bases overtime pay on the average hourly rate, derived by dividing the fixed salary and any non-excludable extra pay (e.g., commissions, bonuses, hazard pay) by the actual hours worked during a given workweek. The average hourly rate varies weekly depending on actual hours worked. For hours beyond 40 in the workweek, the employee receives only an additional 0.5 times (or “half time”) of that rate (as opposed to the (1.5x) federal overtime compensation.)

For this method’s application, agreement between employer and employee is crucial, affirming that the fixed salary covers all hours worked each week (excluding overtime premiums and any additional pay). Employees’ weekly hours must genuinely fluctuate, and the agreed-upon fixed salary must be provided even for weeks with fewer hours than their standard schedule.

It’s important to note that the fluctuating workweek method isn’t suitable if the salary is intended to cover a specific, fixed number of hours per workweek. For instance, it wouldn’t apply to public agency employees engaged in law enforcement or fire protection tasks, receiving a salary for specific, predetermined hours within a work period.

In the United States, permissible deductions from a salaried employee’s pay vary, but common deductions include taxes, court-ordered payments, and contributions to employee benefits like healthcare plans and retirement accounts. Employers must ensure that these deductions comply with federal and state laws and are properly authorized by the employee.

Employee benefits and protections are provided under both federal and state laws. These include minimum wage requirements, paid leave, health and safety regulations, and anti-discrimination provisions. While federal laws establish baseline standards, individual states often have additional regulations that provide further benefits and protections.

To ensure compliance with employee rights and protections, employers should stay informed about federal laws such as the Fair Labor Standards Act (FLSA) and state-specific regulations. Employees have the right to report violations to agencies such as the U.S. Department of Labor or state labor departments. Likewise, employers should regularly review their policies to ensure they remain up-to-date with legal requirements.

In the United States, safeguarding your rights as a salaried employee is of paramount importance. If you believe your salaried employee rights have been violated, taking swift and informed action is crucial. Begin by carefully documenting any instances of violations, including dates, times, and relevant details. Reporting violations to the appropriate authorities or labor departments is the next step. You can file a complaint with the U.S. Department of Labor’s Wage and Hour Division or the relevant state labor department. They will investigate your claim and take necessary actions to rectify the situation. Keeping a record of your complaint and any subsequent communication is vital. It’s important to know that you have legal protections against retaliation for reporting violations.