No, what you describe is simply not legal. To be salaried, an employee must be paid the same regardless of hours worked per week: a salaried employee earns the same weekly salary for 30 hours as he or she does for 55 hours. If you vary pay by hours, you are paying the employee on an hourly basis; if you are paying employees on an hourly basis, you cannot "cap" their earnings, but instead must pay them for all hours worked, including overtime (time-and-a-half, not straight time or base pay) when they work more than 40 hours in a week. You may wish to contact the department of labor, since it appears your employer is violating the wage and hour laws.