A salaried employee is a worker that receives a fixed amount of pay, also known as a salary, from an employer. In comparison to hourly workers, salaried employees receive their full compensation, even if they work fewer hours than the standard 40-hour week.
What are the Labor Laws for Salaried Employees?
The Fair Labor Standards Act (FLSA) is a federal labor law that governs fair labor standards, minimum wage, overtime, child labor protections, and the Equal Pay Act. Under the FLSA, employees are considered “exempt” or “non-exempt.”
Non-exempt employees are entitled to overtime pay.
This means exempt salaried employees do not qualify for overtime or minimum wage. To be eligible for an exemption, employees must earn at least $684 per week ($35,568/year) on a salary basis and perform exempt job duties as defined by the FLSA.
What does it mean to be a Salaried Employee?
Employees who are paid a salary are often qualified as exempt employees and receive a fixed amount of pay usually set yearly by the employer and divided into pay periods, such as weekly, bi-weekly, or monthly.
Salaried employees often have better benefits like paid vacation, medical insurance, paid sick leave, retirement, and bonus plans than hourly employees.
Perks of being a Salaried Employee
Disadvantages of being a Salaried Employee
Flexibility in working hours
Not entitled to overtime pay
Better benefits, bonuses, retirement plans, PTO, sick days
May have to work long hours and weekends
More job security
Harder to find work-life balance
Guaranteed and steady income
Employers have higher expectations
Better job positions and more career prospects
Reduced availability for other jobs
How Many Hours a Week Does the Average Salaried Employee Work?
Some of the pros of being a salaried worker are that usually, they are given more freedom. They do not need to track their hours worked and are not required to clock in and out of work.
However, the cons are that salaried positions are often expected to do whatever it takes to complete job duties.
This usually means working extra hours for no additional salary.
While the standard is a 40-hour workweek, the average salaried employee spends 45-50 hours working per week. In fact, according to a poll by Gallup, the average workweek is 47 hours long.
Is There a Limit to How Many Hours a Salaried Employee Can Work?
The current laws and regulations do not provide a maximum number of hours that an employee can be required to work. This often means that for salaried workers, it is harder to find a good work-life balance as they usually have to work late or take work home.
An exempt employee from FLSA and any state, local, or union overtime laws may be legal to work 60 hours a week. Employers are not required to pay overtime, one-and-a-half pay, or any bonuses on top of their salary.
While the FLSA does not state that work on the weekends needs to be compensated, usually, this condition is agreed upon and discussed between the employer at the time of hire.
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Do Salaried Employees Have to Work 40 Hours a Week?
The short answer is no.
Employees can work more or less than 40 hours a week, as long as their duties are performed well. Salaried employees cannot have their pay deducted if they work less than 40 hours per week. If an employer wants to deduct this time from their salary, the employee can be seen as non-exempt and entitled to overtime compensation.
Salaried employees may also refuse to work overtime, but the refusal doesn’t come without consequences and jeopardizes their job stability.
If an employee takes personal time off, other than for sickness or disability, that time is deducted from their allotted vacation/personal time. If a salaried employee runs out of PTO, pay deductions are permissible under FLSA regulations if they have exhausted their PTO benefits.
Can you Furlough a Salaried Employee?
Under the FLSA, a specific rule applies to furloughs to exempt employees, stating that employees must receive their full salary if they perform any work during a furlough. If a furlough lasts a full workweek, exempt employees’ pay is accordingly reduced.
Is it Legal to Deduct Pay from a Salaried Employee?
Deductions from an exempt salaries’ employee are permissible for the following items:
- If an employee takes one or more full days of leave for personal reasons other than sickness or disability.
- As a penalty imposed in good faith for safety rule policy infractions.
- As an unpaid disciplinary suspension for one or more full days.
- If the employee works less than an entire week for the first and last week of employment.
- An employer is not required to pay the full salary for weeks when an exempt employee takes unpaid leave under the Family and Medical Leave Act.
- Absences of one or more full days occasioned by sickness or disability (including work-related accidents) if the deduction is made per a bona fide plan, policy, or practice of providing compensation for loss of salary occasioned by such sickness or disability.
- To offset amounts employees receive as jury or witness fees or for military pay.