July 22, 2014

Salary Levels and Overtime Exemptions Under the Fair Labor Standards Act

Employers who wonder whether they have properly classified their salaried employees as exempt from overtime under the Federal Fair Labor Standards Act (FLSA) would be well advised to consider one simple principle: the higher the employee’s salary, the more likely the employee will be found to be exempt.

The Department of Labor’s (DOL) comments to its FLSA regulations provide: ”employees at higher salaries are more likely to satisfy the requirements for exemption as an executive, administrative or professional employee.” DOL investigators have also admitted to me in wage and hour audits that they will closely scrutinize the duties performed by any salaried employee who makes less than $45,000 annually (even though the FLSA’s annual minimum salary is only $23,660).

This makes sense as a practical matter. The DOL assumes that if an employee is being paid a significant salary, the employee is likely performing exempt work, as the company would not pay a high salary for mindless or menial work. Furthermore, the DOL has less concern that an employee who works a lot of hours is being “taken advantage of” if he is compensated well.

Of course, one has to meet the “duties test” of any exemption. But any company concerned about whether its salaried exempt employees are improperly classified should first look at the amounts of salaries paid. The higher the salary, the less scrutiny there will be on whether the employee satisfies a particular exemption’s “duties test.”


About the Author

Mitchell W. Quick Michael Best Friedrich LLP

Mitch Quick is a partner whose practice includes all aspects of management labor and employment law, with an emphasis on employment discrimination litigation, wrongful discharge, and wage and hour law issues. He has represented large and small manufacturing facilities, dairy cooperatives, hospitals, financial institutions, nursing homes and county and municipal employers. He is co-author of Michael Best & Friedrich’s “Guide to the Fair Labor Standards Act” and editor of the Firm’s “Wage and Hour Question of the Month.”

Mr. Quick's practice...


Boost: AJAX core statistics

Legal Disclaimer

You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's  Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on are intended for general information purposes only. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.  

Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is  intended to be  a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional.  NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. 

Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.

The National Law Review - National Law Forum LLC 4700 Gilbert Ave. Suite 47 #230 Western Springs, IL 60558  Telephone  (708) 357-3317 If you would ike to contact us via email please click here.