labor lawAdivision of labor law center

A recent case in Maine shows just how difficult it can be to determine if a salaried employee is entitled to overtime. Violations of federal and Maine minimum wage laws were at the heart of a settlement recently reached between Wal-Mart and the US Department of Labor.  Wal-Mart, a retail giant, will pay almost 87,000 employees in Maine and across the nation back pay and interest totaling $33 million.

Wal-Mart has to pay these employees because they did not receive proper overtime compensation. These employees, who often worked long hours, were salaried and held jobs such as manager trainee, programmer trainee, and intern. Although many people believe that no salaried employees receive overtime, that isn’t true. In this case, the employees were what the US Department of Labor ruled as “non-exempt salaried.” When employees are considered “non-exempt salaried,” they should receive overtime pay for hours worked beyond the standard 40 per week.

Federal and Maine minimum wage laws specify that not all employees who are salaried are exempt from overtime compensation. New guidelines established within the last few years specify that if an employee is paid less than $455 each week, they should be paid overtime if they work in excess of 40 hour a week. Salaried managers who earn more than this may still be entitled to overtime.  

This settlement concerned manager trainees. Many of these employees had little say in decision making but still had to work long hours. These employees were paid less than $23,600 a year, so they still were eligible for overtime.

Employees often think that salaried workers cannot receive overtime, but that is not true. The way the guidelines work is that if an employee is paid $23,660 a year or less, they should be paid overtime for work they do beyond 40 hours a week. Under these guidelines, employees earning less than $455 a week can receive overtime.

That doesn’t mean that workers who earn more are automatically exempt from overtime payments. Managers who are salaried employees do not receive overtime if they have specific

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