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Overtime Laws for Salaried Employees

Most hourly workers understand that they receive time and a half when they work in excess of forty hours per week. However, many people think that salary based employees are exempt from these requirements. Many businesses follow the logic that salaried employees are paid a salary to do their job and they need to take the amount of time necessary to get the job done. In North Carolina, not understanding overtime laws can be a dangerous mistake.

Our firm recently represented a group of employees who were receiving a salaries and not being paid overtime for their work. The employer contended that the employees were exempt and that overtime was not required. Our employees received a $65,000 settlement from their employer which, after attorney fees, netted each employee more than the hours they would have received for working overtime.

Being a salaried employee does not exclude employers from paying overtime requirements unless that employee is exempt. Under the North Carolina Wage and Hour Act, an employer can be subject to liquidated damages equal to double the overtime amount found to be due the employee unless the employer can show that any violation was in good faith and that the employer had reasonable grounds for withholding the pay. A court can also order that the plaintiff’s attorney fees be paid. It also bears mentioning that the opposite does not necessarily apply. Even if an employee would be exempt, generally if they are not salaried or paid on a flat-fee basis, overtime must be paid.

Exempt employees must have a guaranteed salary of $455.00 per workweek – this is why hourly employees are generally not exempt, their salary is not guaranteed – and fit into a specific category of exemption, as defined by the federal Fair Labor Standards Act. In 2016, the overtime laws will change to require that exempt employees make $913.00 per week. The primary categories consist of executive (supervisory) employees, administrative employees, and certain professional, outside sales, and computer employees. The importance of the job or the skill level involved is often not dispositive as to whether overtime must be paid. Law firms deal with this issue every day as paralegals — despite their tremendous importance to any law firm — are not exempt employees.

Employees, if you are salaried and working over 40 hours per week or not receiving a guaranteed minimum salary in excess of $455.00/$913.00, you may be able to recover additional wages owed to you. While the Department of Labor and the North Carolina Wage and Hour Division are rarely successful in obtaining the wages that you are owed, Maginnis Law takes unpaid wages on a contingency basis, meaning no attorney fees are owed unless we recover the funds owed to you. Although we cannot guarantee results, in the past we have typically obtained sufficient funds from the defendant that the employee is made whole before the deduction of our attorney fees and costs.

Maginnis Law, PLLC is a Raleigh business litigation law firm with clients from all over the Triangle area, including in Apex, Cary, Holly Springs, and Wake Forest. Contact the firm at 919.526.0450 or send an email to to discuss issues with the Fair Labor Standards Act and the North Carolina Wage and Hour Act. We understand overtime laws and can help.