Salaried Employee


The term salaried employee refers to workers that receive a fixed amount of compensation each pay period.  Generally, salaried employees are not paid overtime and are not docked pay if they work less than 40 hours in a single workweek.


Salaried employees are entitled to a fixed dollar amount each pay period, regardless of the number of hours worked.  This arrangement contrasts with an hourly employee, which receives compensation that varies with the number of hours worked each week.

Generally, workers that are paid on a salary basis are professionals that hold white collar jobs.  For example, an employee that holds the title of supervisor or manager is typically a salaried employee.  This arrangement helps employers control their operating budgets, since it is possible to accurately predict this labor expense each accounting period.

The mechanism for compensating an employee (hourly or salaried) is one of several tests that determine if the employee is exempt or non-exempt under the Fair Labor Standards Act (FLSA).  Salaried employees making in excess of $455 are always exempt, while hourly employees can be non-exempt if their responsibilities and pay pass the remaining FLSA tests.

If a salaried employee makes less than $455 per week, they may be classified as a non-exempt employee, which means the benefits offered under the FLSA apply.  This includes the payment of overtime when the employee works in excess of 40 hours in a single workweek.  Salaried employees that are also non-exempt under the FLSA rules are not entitled to overtime; however, employers are permitted to provide overtime pay.

If a non-exempt employee is not paid overtime, they cannot be forced to attend meetings that fall outside of their regular work hours.  In addition, employers are not permitted to dock (lower) an employee's pay if they come in late or leave early.  Employers that do not pay salaried employees overtime, but dock them when schedule variations occur, may be breaking the law.  Employees that find themselves in this situation are encouraged to seek the help of their state's Attorney General's office.

Related Terms

non-exempt employee, exempt employee, blue collar worker, green collar workerhourly employee, salary history, salary range