OVERTIME
PAYROLL EXEMPTIONS
by: Independent Business
Association
The following are links to information on state and federal laws regarding overtime payroll exemptions. Employers must pay employees who work over 40 hours in any 7 day period, 1 1/2 times their regular rate of pay for each hour worked over 40 hours, unless the employee is exempt from overtime pay requirements.
DISCLAIMER Overtime exemptions are based on a very complex set
of laws and court decisions. Each overtime pay situation is unique. This
following information is to assist you in understanding the issues involved in
determining if an employee is exempt from overtime pay requirements. But this
information does not contain all of the extremely high number of determining
factors which may apply to a specific situation and therefore cannot be relied
on as assuring compliance with these laws and regulations. The reader is
advised to seek the advice of a qualified attorney for any legal opinions or
advice regarding whether an employee is exempt or not from overtime pay
requirements. When in doubt, the reader is advised to pay the
worker overtime pay as though the worker is not exempt to avoid violating the
state or federal overtime pay laws.
The following information is to assist you in identifying which of your employees may be exempt from overtime pay requirements. There are both Washington State laws and federal laws dealing with the overtime pay exemption issue. Depending on the size of your business and the type of business you are in, the state laws may or may not apply to your business. IBA recommends you review the information about the federal law exemptions and if you appear to meet those requirements, then check the state laws for the same exemption. The federal law applies to a business "engaged in interstate commerce" which generally means:
The more restrictive of the two laws is what applies to a Washington State business. The following are links to the various federal and state overtime pay exemptions:
Administrative Overtime Pay Exemption
Executive Overtime Pay Exemption
Professional Overtime Pay Exemption
Professional-Computer Worker - Overtime
Pay Exemption
Salesperson-Outside Overtime Pay Exemption
Salesperson –
Retail or Service – Commission Overtime Exemption
Federal and State Requirements
Salary Basis In addition to all of the preceding regulations, an employer paying employees on salary that meet one of the above exemptions for overtime pay, must also comply with the salary basis requirements of the federal and state overtime regulations. The “salary basis” regulations state when deductions can and cannot be taken from an otherwise exempt salaried employee. Employers MUST comply with the “salary basis” requirements for their exempt salaried employees to maintain their exemption from having to pay them overtime.