Overtime exemptions in white-collar work

The general rule for most Texas workers is that hours worked over the regular 40-hour workweek entitle them to overtime compensation. The law exempts some types of workers from this rule and employers do not need to pay them overtime.

Both employers and employees can misunderstand overtime rules; some employers may even purposely take advantage of employees who do not know their rights. If you suspect you may have overtime owed to you and your employer is not paying you, speaking with an experienced attorney can be the first step in protecting your rights and livelihood.

Not all salaried employees are exempt

The top misconception about exemption from overtime is that a salary always means exemption. The reality is more complex than that. Determining the correct answer in a given situation can involve dealing with complicated legal issues.

The salary test

The law sets forth two major requirements, both of which a salaried employee's situation must meet in order for that employee to be exempt. One is the salary threshold. Currently, employees with a yearly salary of less than $23,660 cannot be exempt. A federal court recently struck down a rule change proposed by the Obama adminisration that would have raised this limit substantially.

The second requirement involves a close examination of the employee's duties. Generally, employees should only be exempt if they occupy positions of real leadership, independence or creating works of art.

In a nutshell, executive employees must have real, substantial authority to make important decisions that affect the company. Similarly, administrative employees provide substantial support to the entire company and are a major part of it, including making decisions. Other exempt professionals typically engage in one of the standard professions that require state licensing or certification or create original works of art, music or writing. Finally, outside sales representatives who spend most of their time outside the office and top computer professionals may also be exempt.

It is important to know that an impressive-sounding title is not enough to make an employee exempt. For instance, some companies refer to all their middle managers as vice-presidents. One must instead look at the duties and authority of the position to understand whether it should be exempt.

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