One of the main areas looked at is overtime for salaried employees that can be classified as hourly employees. This month's tax tip briefly looks at the laws in this area to help you avoid future problems dealing with this issue. The Problem Many businesses today have a large number of employees on a salary pay scale as opposed to paying them on an hourly basis. However, if those salaried employees are working overtime, you, as the employer, could be subject to penalties and fines as well as paying back the overtime to those employees for the last two years. Fortunately, many employees fall under one of the four exceptions to the overtime law and, therefore, can be salaried.
Lets take a look at the exceptions.
Administrative Employee . Since many of you have a sales staff, I thought it would be worth the time to give this area more attention. An outside salesperson is an employee who is away from the employer's business for the purpose of making sales. Outside salespeople are considered exempt and therefore, can be either salaried or a commissioned employee. Those employees that are considered inside sales staff must usually be on an hourly wage system and compensated for their overtime.