Overtime Pay Requirements for Salaried Employees

Janet A. Meade, PhD, CPA

Business owners might be surprised to learn that their biggest liability could be their workforce. About 115 million employees, or 86% of the workforce, are covered by federal overtime rules, according to the U.S. Department of Labor (DOL). Increasingly, these workers are bringing suit against their current or former employers for violations of the wage-and-hour rules of the Fair Labor Standards Act (FLSA). Targets of the lawsuits aren't just employers of hourly workers. Class-action complaints are currently pending against BDO Seidman, PricewaterhouseCoopers, Sun Microsystems, Intel, Disney, J.P. Morgan Chase, and scores of other employers of skilled, salaried employees. Given this litigious landscape, it is imperative for CPAs to understand the overtime rules so that they can avoid potentially devastating damages.