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Overtime Pay

Dear Dave
I am currently looking to modify the benefit package for my firm and provide additional benefits to professional employees. Where can I find information with regard to available options and governing law? I am considering overtime for salaried employees but have been advised that federal law prohibits this. However, I’m aware of several firms that do pay all employees overtime. Are they breaking the law, or am I just wrongly informed?

Dear DM
Yes—many firms do elect to pay "salaried" staff for hours worked above and beyond the standard work week and that is generally not illegal. What is illegal is if you were to dock or otherwise deduct salary from "salaried" individuals should they happen to come up a couple of hours short during a pay period. It’s generally the docking that gets you in trouble, not the additional pay, but this is a tricky legal matter and you definitely need to seek proper legal advice before making any changes to your payroll practices.

At the time of this article, there is legislation pending to completely overhaul the federal wage and hour rules that could very well have an impact on who is and who is not considered eligible for overtime pay and the methods by which overtime is to be determined. For a definitive answer to your question you should contact the US Department of Labor, Wage and Hour Division for your area (see the government pages of your local phonebook). Otherwise, you may wish to review your questions and proposed changes with a local attorney who specializes in wage and hour issues.

Wahby and Associates