One requirement for an employee to be exempt from Overtime pay requirements is that he or she be paid on a salaried basis. The amount has to be at least $684 per week, which based on 40 hours is a hourly rate of $17.10. What if the amount is equal to only one-day's pay? Is that a "salary" that could exempt the employee from overtime?
"No" is the answer that comes from a recent case, Pickens v. Hamilton-Rykers, by the federal appeals court, the Sixth Circuit, that covers Kentucky. The company claimed that the employee was paid a "salary" and therefore was exempt from overtime even though the so-called "salary" was only $800, which was equal to 8 hours at the employee's rate of $100 per hour.
Here's the rule the court announced: "A weekly salary must compensate an employee 'for the general value of services performed' over the week, as opposed to merely serving as a minor auxiliary to an employee's substantial hourly or daily pay." In other words, don't call a day's pay a "salary" and try to get out of paying overtime.
We discussed the Pickens case more in this post: A Salary Must Be For a Regular Week's Worth of Work
Lexington, Kentucky overtime lawyer Robert Abell represents individuals and employees to recover the overtime pay they've earned; contact him at 859-254-7076.
