BOURGON HR Solution Blog

Payroll Practices: White Collar Exemptions Part One

Posted by Mike Bourgon on Thu, Sep 25, 2008

The white collar exemptions from the overtime rule are narrowly construed and an employer is always in a position to prove that overtime pay was properly denied. The most common exemptions apply to “executive, administrative and professional” employees.

If an employee receives a salary of at least $455 per week and meets the regulatory definitions for “duties”, they do not have to be paid overtime for hours worked over 40 in a week because their salary is intended to cover all of their working time. If, however, an employee is misclassified as exempt, the employer may be liable for substantial back pay for unpaid overtime and liquidated damages (which the statue defines as double back pay) in addition to other damages for willful violations.

The statute of limitations is either two or three years depending on whether the violation was willful.

In addition, managers or supervisors can be held individually liable.