While companies may want  to classify their employees as salaried – whether that is to avoid the annoyance of keeping up with time, or because they think it is more favorable to the employee – Massachusetts and federal laws set out specific guidelines on when employees may be properly classified as salaried and thus considered exempt from overtime.  If a company improperly classifies a worker as salaried, the company runs the risk of potential federal and state wage claims.

The three most common types of overtime exemptions are (1) Executive Exemption; (2) the Professional Exemption; and (3) the Administrative Exemption.

Executive Exemption: To qualify under this exemption, the employee’s primary duty must be managing the business (or subgroup of the business).  The employee also must regularly supervise the work of two or more employees.  In addition, the employee must have the authority to hire or fire other employees or his or her hiring suggestions are given “particular” weight.

Professional Exemption: To qualify under the professional exemption, the primary duty of the employee entails performing work which requires advanced knowledge of a “predominantly intellectual nature” which includes work that requires the “consistent exercise of discretion and judgment.”  The employee must have advanced knowledge in a field of science or learning and this advanced knowledge must be customarily gained through “a prolonged course of specialized instruction.”

Administrative Exemption:  To qualify under this exemption, the employee’s primary duty must be office or non-manual work which directly relates to the management or general business operations of the employer or employer’s customers.  In addition, the employee’s primary duty must include exercising discretion and independent judgment regarding “matters of significance.”

The executive, professional, and administrative exemptions all have threshold weekly salary requirements.   In addition to these, Massachusetts General Law Chapter 151, Section 1A sets forth numerous other overtime exemptions.

If an employee’s job duties do not fit within the exemptions set forth under the Fair Labor Standards Act or Massachusetts law, the employee may be entitled to overtime pay.  Employees who are not considered exempt must be paid at 1.5 times the hourly rate, for every hour worked over 40 in a given work week.  In addition, overtime claims under Massachusetts fail under the umbrella of the Wage Act – and employees who succeed at trial on their claims are entitled to an award of mandatory treble damages and their attorneys fees.

At the Harbor Law Group we understand the risk that comes with failing to pay employees properly.  We regularly represent employers who are faced with demands for failure to pay overtime and represent clients at all stages of the litigation process.  In addition, we consult with companies regarding the proper treatment and payment of their employees.