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FORTUNE Small Business:

Do salaried workers get overtime?

FSB's Anne Fisher helps clear the confusion about a tricky issue.


Dear FSB: I employ several truck drivers who make deliveries to clients and service our coffee machines and water coolers. They were hired on salary and told that they would work a 45-hour week with no overtime (though in practice they rarely work more than 40 hours). This is okay, right? -Michael Conzo, Vice President Filterfresh Coffee Services West Babylon, N.Y.

Dear Michael: Sorry, but no. Contrary to popular belief, paying an employee a weekly salary does not necessarily make him ineligible for overtime pay. The federal Fair Labor Standards Act says that the duty to pay overtime depends upon the type of work your employees do. Section 13(a)(1) of the FLSA exempts "any employee employed in a bona fide executive, administrative, or professional capacity" - you, for example - as well as your outside sales force.

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Congress has never precisely defined the terms "executive" or "administrative," which are subject to interpretation by the courts, but it's clear that truck drivers who don't supervise aren't covered. For the weeks in which your workers put in more than 40 hours, the law requires you to pay them overtime "at a rate not less than time and one-half their regular rates of pay."  Top of page

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