Many employers wrongly classify hourly workers as salaried "exempt" employees to avoid paying overtime. Exempt employees are not entitled to overtime under the Fair Labor Standards Act—but strict legal tests determine who actually qualifies. If you're classified as exempt but don't meet legal requirements, you're owed overtime for every hour over 40.
What "Exempt" Means
The FLSA requires overtime pay for most workers. Exempt employees are exceptions—they don't receive overtime regardless of hours worked. The exemption is supposed to apply only to certain professional, administrative, and executive roles. Being paid a salary does not automatically make you exempt.
Exemption requires meeting both a salary test and a duties test. Failing either means you should be classified as non-exempt and entitled to overtime.
The Salary Threshold
To be exempt, employees must earn at least a minimum salary level. The federal threshold is $684 per week ($35,568 annually). Many states set higher thresholds—California's is significantly higher, and New York's varies by region and employer size.
Salary must be paid on a "salary basis," meaning consistent pay regardless of work quantity or quality. Docking pay for partial-day absences or poor performance can destroy exempt status. If your employer treats you like an hourly worker—adjusting pay based on hours—you may have lost your exemption.
Executive Exemption
The executive exemption applies to managers who supervise two or more full-time employees, have authority to hire, fire, or make personnel recommendations, and whose primary duty is management. A "manager" title without genuine supervisory authority doesn't qualify.
Working managers who spend most time doing the same work as subordinates often don't qualify. If management is secondary to your regular duties, you may be misclassified.
Administrative Exemption
The administrative exemption requires performing office work directly related to management or business operations, and exercising discretion and independent judgment on significant matters. This is the most frequently misapplied exemption.
Production work—actually making or selling the employer's product—doesn't qualify as administrative. Neither does following detailed procedures without meaningful independent judgment. Processing transactions, following scripts, or completing routine tasks doesn't involve "discretion and independent judgment" as the exemption requires.
Professional Exemption
The professional exemption covers workers in fields requiring advanced knowledge acquired through prolonged specialized study, like medicine, law, engineering, or accounting. Simply calling a job "professional" doesn't make it exempt—the work must actually require professional-level training and judgment.
A creative professional exemption exists for work requiring invention, imagination, or talent in artistic or creative fields. This is narrowly applied and doesn't cover most creative-adjacent jobs.
Computer Employee Exemption
Computer professionals may be exempt if they're paid at least $684/week salary or $27.63/hour, and their primary duties involve systems analysis, software engineering, programming, or similar high-level work. Help desk workers, technicians, and those following detailed procedures typically don't qualify.
Signs You're Misclassified
Consider whether your job genuinely requires the independence, authority, or advanced training these exemptions demand. If you follow detailed instructions, need approval for decisions, or do the same work as hourly employees, you may be misclassified.
Common misclassification scenarios include assistant managers who supervise no one, inside salespeople with little autonomy, customer service workers labeled "administrative," and tech workers who follow standard procedures rather than engineering solutions.
Calculating Your Back Overtime
If misclassified, you can recover unpaid overtime going back two years (three if the violation was willful). Calculate all hours worked over 40 per week, multiply by 1.5 times your regular rate. Liquidated damages can double this amount.
For example, working 50 hours weekly when your salary equals $20/hour means 10 weekly overtime hours at $30/hour, or $300/week. Over two years, that's $31,200 before liquidated damages double it to $62,400.
Taking Action
You can file complaints with the Department of Labor or pursue private lawsuits. Class or collective actions are common in misclassification cases because employers typically apply the same classification to similar positions.
Getting Legal Help
Exemption analysis requires careful evaluation of job duties against legal standards. Employment attorneys can determine whether your classification is legally justified and calculate your potential overtime recovery. Most work on contingency for wage claims.