By Anne Torregrossa, JD, Brann & Isaacson
When pondering wage and hour law, folks generally think in terms of “hourly” and “salaried” employees to distinguish between workers who are subject to the minimum wage and overtime requirements and those who aren’t. However, they are really talking about “nonexempt” and “exempt” employees under the Fair Labor Standards Act (FLSA).
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The distinction is that “hourly” and “salaried” refer to how regular pay is calculated but have nothing to do with whether a person is subject to the FLSA’s minimum wage and overtime protections. Using those terms accurately is important because a “salaried” employee can still be “nonexempt” and eligible for overtime pay and other protections.
Calculating overtime for salaried employees can be a bit tricky because they don’t have a traditional hourly rate. To solve this problem, federal regulations allow you to calculate a salaried employee’s overtime rate based on a fluctuating workweek (FWW).