I woke up this morning to three emails from people asking essentially the same question: Can my manager stop paying me overtime by declaring that I'm a salaried employee? While giving an entirely correct answer would involve looking carefully at the job description, the answer is almost always no.

Human resources manager and employee-relations expert Rebecca Goldbach says, "Everyone is born non-exempt." Non-exempt means that you are subject to the rules in the Fair Labor Standards Act (FLSA). This means that if you work more than 40 hours in a workweek, you are eligible for overtime. (The federal government, of course, has exempted itself from portions of this law, but business owners must follow it. And, California, of course, has made it more complicated and says you are eligible for overtime if you work more than 8 hours in a single day.)

To be exempt from overtime requirements, you have to meet specific standards. You have to have a minimum salary level, you have to receive the same pay every week regardless of the hours you work (with some wonky IT exceptions), and you must meet the duties test. 

The first two should be easy for any business to prove--although lots of managers want to not pay overtime, but dock pay if someone works 38 hours instead of 40. You can't have it both ways.

The real tough part of FLSA is the duties test. And this is where Goldbach's rule comes into place. You have a new baby employee--someone you've just hired (regardless of age and experience). Unless you can prove otherwise, that employee is non-exempt and eligible for overtime pay.

If your manager changes you from non-exempt to salaried exempt and your job description didn't change, it's a huge red flag. It's possible that you were incorrectly classified (it's always legal to pay someone by the hour and provide overtime), but then your boss (or HR) should be able to clearly explain why your status will change even if your job description didn't. If they can't explain, it's a red flag.

You need to fit one of the exemption categories. While these can be complicated and are the subject of countless court cases and even more out of court settlements, they are:

  • Managers. You need to manage two or more employees and do managerial tasks for the bulk of your work. The job title is irrelevant here. If you are a shift manager at a local fast food joint but spend 75 percent of your shift making burgers and running a cash register, you're eligible for overtime.
  • Professional. If you're a doctor, lawyer, or CPA, you're exempt. These are generally credentialed or experienced professionals. These people work independently.
  • Administrative Professionals. You may think this means administrative assistants, but it decidedly does not. These are people like HR, Finance, Marketing, and IT, who work independently and have responsibility for projects and programs. They may not manage people directly, but they do tend to manage functions. 
  • Outside Sales. These people can have varying paychecks because of commissions, but otherwise, have the same rules as everyone else. If you sit at your desk and make sales calls, you don't count.

Now, these are basic descriptions, but if you can't see yourself in any of these boxes, go back to HR or your boss and say, "I've been reading up on the Fair Labor Standards Act, and I don't see how my job can qualify as exempt from overtime. I'm afraid the company will get into trouble."

That last part is designed to make them think. You can't get in trouble for not being paid correctly. And, in fact, you can't waive your right to overtime pay. 

If you feel that you are being paid unfairly, and you've already spoken to your manager/HR, and nothing has changed start keeping detailed records of the number of hours you actually work. Keep these records at home.

Then, you can file a complaint with the Department of Labor. This is a protected activity, and your company should not punish you for it. (Although, to be honest, companies that cheat their employees out of overtime pay aren't sticklers for rules.) Your records will be invaluable and help you get the money you deserve.

You don't have to file immediately--you have two years to file (and sometimes three) for back pay. So, a good strategy for dealing with a sticky situation can be to track your hours, find a new job, quit, and then file against your former company. 

FLSA violations are everywhere. Don't be afraid to speak up!