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Subject: Salary Non-Exempt

1.  Salary Non-Exempt

Posted 8 days ago
We are looking to hire a salaried position where we want to offer overtime after 45 hours in a pay week.  This is an office manager's position and we believe it meets the exemption criteria for being exempt from overtime.  Is there anything that we should be concerned about regarding the requirement to work at least 45 hours before overtime is paid?

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Douglas Scott
Human Resource Manager
Industrial Steel Treating Co.
Jackson MI
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2.  RE: Salary Non-Exempt

Posted 7 days ago
Hi Doug -

We do this with our inside sales guys.  The thing is - they still get OT after 40 hours.  It's just a different rate until they reach 45 hours.  OT rates are calculated based on 45 hours, which means that they basically receive a "half-rate" for hours 40.01-45.00 and then the one-and-one-half rate for 45+.

For example, if they are Salary Non-Exempt with a base salary of 52,000, with OT based on 45 hours, they are paid the following rates per week and hour:
Weekly: $1000 Salary
Adjusted Hourly Rate based on 45 hours: 22.22 (this is calculated by taking annual salary and breaking down to weekly amount, then dividing by 45 hours - [52000/52]/45)
Hours 40.01-45.00: 11.11 (one-half of adjusted hourly rate)
Hours 45+:   33.33 (one-and-one-half adjusted hourly rate)

Say this person works 47 hours in one week, they get:
$1000
$55.55 (5 hours at 11.11/hour)
$66.66 (2 hours at 33.33/hour)
$1122.21 Total

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Stephanie Winterquist SHRM-CP
HR Manager
O'Day Management
Fargo ND
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