Just because you're paid a salary doesn't mean you're exempt from overtime. To be exempt, you must meet both the salary basis test (paid a set weekly amount) and the duties test (performing executive, administrative, or professional duties). Most salaried workers I see are misclassified as exempt when they're not.
Does being paid a salary really mean no overtime?
One of the most persistent myths in employment is that being paid a salary automatically means you don't get overtime. It's not true. Federal law permits overtime exemptions for certain categories of workers, but being salaried is only half the equation.
To be exempt from overtime under federal law, you must satisfy two separate tests. Either test can disqualify you. You must pass both to be exempt. Many employers focus only on the salary test and ignore the duties test entirely. That's negligent, and it creates liability.
What is the salary basis test?
The salary basis test has two parts: the amount and the nature of payment.
The amount: As of this writing (2026), the FLSA salary threshold is $684 per week, or approximately $35,568 per year. This number adjusts periodically. If you're paid less than $684 per week, you're automatically not exempt. You get overtime, period. Some states have higher thresholds, but this is the federal floor.
The nature of payment: You must be paid on a salary basis. That means you're paid a fixed amount for a workweek, regardless of the number of hours worked (within limits). If you're paid by the hour, you're not on a salary basis. If you're paid piecemeal, you're not on a salary basis.
The critical limitation: the employer can't dock your salary for absences, tardiness, or partial day absences. If your employer deducts your salary for these reasons, the salary basis is destroyed, and you become non-exempt.
I see this all the time. The employer says, "You're salaried, so no overtime." But the employee handbook says, "We deduct one hour of salary for every hour of unpaid leave." That deduction destroys the salary basis. The employee is now non-exempt.
Or the employer requires an unpaid lunch break and doesn't count that time as work. That's fine. But if the employer cuts the salary when the employee is a few minutes late, or doesn't work the full day due to a doctor's appointment, that's not fine. The salary basis is destroyed.
What is the duties test, and why is it where most employers fail?
The duties test is the harder part, and it's where most salaried employees should actually qualify for overtime but don't.
To be exempt, your job duties must be one of the following:
Executive exemption. You must have primary responsibility for managing the business or a recognized department or subdivision. You must customarily and regularly direct the work of at least two employees. You must have authority to hire, fire, or recommend hiring and firing. You must regularly exercise discretionary powers.
Note: You don't have to have a fancy title. You don't have to work in an office. You don't have to be the final decision-maker. But you must actually manage employees and exercise genuine discretion.
Administrative exemption. You perform non-manual work directly related to management policies or general business operations. Your work requires discretion and independent judgment on matters of significance.
This is vague, and I see it abused constantly. An HR coordinator is not administrative exempt just because they schedule trainings. A scheduling assistant is not administrative exempt. Even an office manager might not be if they're just following procedures, not exercising genuine discretion on significant matters.
Professional exemption. Your work requires knowledge of an advanced type in a field of science or learning, acquired through a prolonged course of specialized instruction. Or you're a teacher, doctor, lawyer, architect. Or you work in a recognized profession requiring advanced education.
This is the most misused category. Companies classify anyone with a college degree as "professional exempt," and it's wrong. You have to be in an actual profession: law, medicine, engineering, accounting, teaching, nursing, architecture. Or your work has to require genuinely advanced specialized knowledge beyond what a high school diploma provides.
How do employers misuse the exemptions?
Here's a pattern I see repeatedly. The employer says, "You're a manager," so you're exempt. But what do you actually do? You supervise a register, check in on two part-time employees, and spend most of your time doing customer service yourself. You don't have authority to hire or fire (the district manager does). You don't set policy. You follow the employee handbook like everyone else.
That's not an executive exemption. You're non-exempt. You get overtime.
Or: the employer says, "You're administrative," and puts you in "salary" because you handle some scheduling and coordinate meetings. But you're following procedures, you're not exercising discretion, and you don't make decisions about matters of significance. You're a coordinator, not someone performing administrative exemption work.
Or: the employer says, "You're professional exempt" because you have a college degree. But you're not a lawyer, engineer, accountant, doctor, teacher, nurse, or architect. You're not doing work that requires advanced specialized knowledge. You're doing work anyone could do with on-the-job training. You should be non-exempt.
Why do duties matter more than titles or degrees?
The exemptions are based on what you actually do, not what your title is or what degree you have. The employer can't exempt you just by calling you a "manager" or "professional." They have to prove that you actually perform the exempt duties.
Courts apply this test strictly. If you spend 70% of your time doing non-exempt work (customer service, sales, manual tasks) and 30% doing exempt work (management or advanced professional work), you're probably not exempt. The exempt duties have to be the primary responsibility.
I had a case with a person titled "Operations Manager." The employer argued exempt. But the operations manager was out on the floor, stocking shelves, training employees on the job, running the register when they got busy. She wasn't hiring or firing. She wasn't setting policy. She was working, not managing. The court said she was non-exempt. She got three years of back overtime.
What should you do if you think you are misclassified?
First, check the numbers. Are you being paid at least $684 per week? If not, you're automatically non-exempt. You get overtime.
If you are being paid at least $684 per week, look at your duties. Do you actually manage employees? Do you actually exercise discretion on matters of significance? Or do you follow procedures, do work similar to non-management employees, and just have a fancy title?
If the exempt duties are not your primary responsibility, you're likely non-exempt. You're entitled to overtime for all hours worked over 40 in any workweek.
Document your typical day. What percentage of your time do you spend doing management work, administrative work, or professional-level work? What percentage do you spend doing the same work everyone else does?
Then reach out. I handle these cases on contingency. If there is no recovery, you pay nothing, not even the costs. I handle these cases nationwide.
The law is clear: a salary and a title don't make you exempt. Your actual job duties have to meet the test. If they don't, you deserve overtime.
Call me at (512) 799-2048 for a free consultation.