Businesses and employees tend to approach their relationship from opposite mentalities. A worker wants to maximize the compensation that they receive for the job that they perform, while a company typically wants to get the best work or labor possible while minimizing how much they pay.
Hiring workers on a salary basis can benefit workers and businesses. The worker has guaranteed income that allows them to successfully budget for their necessary expenses, while the company can also budget more easily because it has control over its staffing expenses.
One of the ways that hiring workers on a salary basis benefits a company is by reducing overtime wages when the workload is unusually heavy. However, salaried workers should know that there are circumstances where they qualify for overtime compensation.
When does overtime pay apply?
For most employers, overtime wages are only necessary for hourly workers whose compensation varies from week to week depending on the amount of time they work. When an hourly worker puts in more than 40 hours in a given pay period, the company will have to pay them at least time-and-a-half for the hours over 40 that they have worked.
California state law also mandates that employers pay overtime wages for hours over eight worked in a specific shift or for situations where a worker must work more than six days in a pay period.
Can salaried workers qualify for overtime pay?
Any company can incentivize workers by offering them overtime pay or bonuses for extra labor or time. However, many salaried workers don’t qualify for overtime pay based solely on federal or state law. They may only receive that extra compensation if their employer decides to give it to them.
Typically, salaried workers are exempt from overtime pay obligations. Unfortunately, some companies have used this exemption to their favor by paying their staff members the lowest amount they legally could in order to require 60-hour workweeks without paying overtime.
The federal government has recently increased the minimum salary for a worker to be exempt from overtime pay. Workers that make less than $35,568 per year or $684 per week may have a claim to overtime wages if their employer demands that they put in more than 40 hours in a given pay period.