Employees’ payment is decided under the minimum wage of every region, state, and federal law. It is based on their contribution to the productivity of the company. However, if an employee is working overtime, they are eligible for overtime payment. But there are some cases in which, even if a person is working overtime, they are not eligible for its payment, and this case is known as the overtime exemption.
Various factors determine why a particular situation should be under overtime exemptions. We need to know these exemptions, and if you want to know in detail about such exemptions, you must consult a wage & hour attorney. However, in this article, we will discuss some of the overtime exemptions for employees. So, let’s begin our discussion about exemptions.
What defines overtime exemptions?
Employees are generally considered to be under minimum wage and must be paid at least minimum wage by the employer. If the employee works overtime, they are also paid for this overtime. However, in certain cases, these overtime employees are not paid for their work, and that is only possible in overtime exemption cases.
Certain factors determine the overtime exemptions. Employers must choose whether or not to pay the extra payment based on these overtime exemptions.
What are the factors affecting overtime exemptions for employees?
- The first exemption for overtime is the salary of the employee. Overtime exemptions are possible when employees are paid twice the minimum wage. If an employee is paid twice the minimum wage, then there will be no payment for their overtime. In such cases, generally, the employees do professional, managerial, executive, or administrative work. However, they must be paid twice the minimum wage to have a balance in their payments.
- Employees who perform mainly managerial functions are exempt from such overtime payments. Overtime is not considered if the process is primarily related to direction and management. Employees who have been involved in management for some time are not exempt. We cannot judge their work in hours, and therefore, they are exempt from such overtime payments.
- You are exempt from overtime payments if you are involved in executive duties. Decision-making, management, and supervising duties are involved in this duty.
- In some cases, salespeople are also exempted from overtime payments. It depends on two criteria: whether the employee is performing inside or outside sales. Inside sales are non-exempted, and they are paid their due for overtime. On the other hand, the outside salesperson is exempt in some cases. This exemption is complicated; therefore, employers must clarify these details with the employees.