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Last month, a United States Court of Appeals ruled that police officers whose salaries minus annunities fell below $455 per week were entitled overtime under the federal wage statute called the Fair Labor Standards Act (“FLSA”). Typically, the first question when determining whether salaried employees are entitled to overtime is whether their job duties are exempt typically under the executive, administrative or professional capacity. In this case, the police officers were not arguing about their job duties. Instead, they were arguing a different provision of the FLSA.

For salaried employees, in order for an employer to legally not pay overtime, the employer must pay the employees at least $455 per week. The District of Columbia was compensating the police officers less than $455 per week but the police officers were receiving annunities / pension payments which together with their salary equaled move than $455 per week. The police officers argued that the pension payments could not be counted towards the calculation of the $455 requirement and the Court of Appeals agreed. Thus the Court of Appeals held that because the employer failed the $455 per week requirement, the police officers were entitled to overtime for all overtime hours.

The Court of Appeals held that the employer:

Generally, employees are entitled to overtime pay for all hours over 40 in a given work week. However, the Fair Labor Standards Act (“FLSA”) allows certain employees to be exempt from overtime pay including an exemption for some computer professionals. The exemption, however, only applies to computer systems analysts, computer programmers, software engineers, and other similar workers who meet the job duties test and who are paid at least $455 per week in salary or at least $27.63 per hour for hourly employees. Unfortunately, many employers incorrectly classify employees who work with computers as exempt when, in fact, their job duties do not place them in the exemption.

To qualify for the computer employee exemption, the Department of Labor states that the following tests must be met:

1. The employee must be paid either at least $455 per week in salary or at least $27.63 per hour;