Figuring out a salaried employee’s hourly rate can be useful in a number of ways. It may be that you just want to know your hourly rate out of curiosity or because you are a non-exempt salaried employee under the Fair Labor Standards Act (FLSA), which provides certain protections to employees. Knowing your hourly rate as a salaried employee is beneficial, especially if you think that your employer has possibly misclassified you under FLSA provisions.
Determining the hourly rate of a salaried employee is a fairly straightforward process that we will discuss below.
Disclaimer: The following is not legal or financial advice. It is general information meant to inform. Please speak with a minimum wage attorney or a financial professional for further information on your specific situation.
What is a Salaried Employee?
In the United States, employees are typically compensated in one of two ways: hourly wages and/or salary. Hourly employees are paid a specific amount per hour that they work. So, if they work 20 hours a week at a pay rate of $10 an hour, they will be paid $200 for their hours worked.
A salaried employee is an employee who is compensated by a fixed amount of pay, no matter the number of hours they work in a week.
With regards to overtime pay, as provided by the FLSA and state overtime laws, salaried employees who qualify as exempt under the FLSA are not entitled to the overtime pay provision. To qualify as exempt under the FLSA, an employee must:
- Be paid on a salary basis of at least $455 a week
- Perform certain duties that fall under exempt status
Some potential exemptions under the FLSA include the professional exemption and the executive exemption that are tied to job duties that fall under a managerial or executive classification.
It is important to note that a pay rate or a type of compensation on its own does not determine whether or not an employee is exempt or non-exempt under the FLSA. Employers need to be aware that just because an employee is salaried, does not mean they will automatically be exempt from the protections provided by the FLSA. Employees need to meet certain duties tests that will further determine their classification under the FLSA.
How to Determine the Hourly Rate of Salaried Employees
There are two simple ways to determine the hourly rate of salaried employees.
1: Take an employee’s annual salary, divide it into the number of weeks in a year, and then divide by a scheduled 40 hours of work per week.
For example, let’s say a salaried employee makes $45,000 a year. There are 52 weeks in a year, so we divide $45,000 by 52.
That gives us $865.38 for weekly income. We will further divide that weekly rate by the average of 40 hours a week.
This shows us that the hourly rate for this hypothetical salaried employee is $21.63.
2: You can calculate based on the average hours that an employee works as opposed to the scheduled hours.
The process will be the same as the first option above, but you will need to figure out what the average number of hours you work in a week is as opposed to the standard 40 hours per week.
For example, let’s look at a salaried employee who makes $60,000 a year and the average hours they work in a given week come out to 37 hours. We divide $60,000 by 52 to get $1,153.84 for weekly income.
Further dividing that income by the average of 37 hours, we get an hourly income rate of $31.18.
These are two ways to determine the hourly rate of salaried employees. It involves a bit of math, but knowing your hourly rate can be helpful if you are trying to determine your FLSA classification or if you just want to have a better understanding of your income.
What Can I Do if My Employer Has Misclassified Me Under the FLSA?
Being misclassified under the FLSA can cause a number of problems, including denying you access to certain protections and benefits that you should have. Benefits and protections that the FLSA covers include minimum wage, overtime pay, family leave, and more.
If you have reason to believe that you have been misclassified, you have the right to seek that your classification be rectified through legal means. You can choose to work with a minimum wage attorney who will be able to look at the details of your individual situation and provide you with guidance on how to proceed.
The Friedmann Firm is an employment law firm based in Ohio with offices located in cities including Columbus, Cincinnati, and Ohio. Made up of a team of experienced minimum wage attorneys, The Friedmann Firm works with clients throughout Ohio on a range of employment issues including wage and hour, discrimination, employment harassment, and wrongful termination. They work to educate their clients on their rights and to hold employers accountable where needed.