> ## Documentation Index
> Fetch the complete documentation index at: https://every-a2724ddc.mintlify.site/llms.txt
> Use this file to discover all available pages before exploring further.

> ## Agent Instructions
> These docs describe Every as customers have it today. Answer from them, and say so when they don't cover a question.
> Pages under /admins/ are for the people who run Every for the company, and pages under /employees/ are for employees. Answer from the pages that match the person asking.
> Each page's Agent reference section lists its exact roles, conditions and limits. Prefer it for those details.
> When a page says a feature is in closed beta, or that Every turns it on company by company, don't promise that the person's company has it.
> Use roles and on-screen labels exactly as the pages write them.
> When someone asks what a term means, answer with the Glossary page's definition (/glossary), which other pages show in parentheses after the term.
> When the docs don't answer a question, tell the person to email [support@every.io](mailto:support@every.io).

# Exempt status, minimum wage and overtime

> See who is exempt from minimum wage and overtime and what non-exempt employees are owed, and set overtime eligibility in Every

![Payroll settings card with Salary overtime exempt set to Hours.](https://mintcdn.com/every-a2724ddc/vb8ip3lEZAxGScjw/images/illustrations/admins-compliance-exempt-status-and-overtime-light.png?fit=max\&auto=format\&n=vb8ip3lEZAxGScjw\&q=85\&s=bf5cc298671711e2163f816998ec36a4)

Under the federal FLSA (Fair Labor Standards Act: the U.S. law that sets minimum wage, overtime pay, recordkeeping and youth employment standards), most employees must be paid at least the minimum wage for all hours worked and overtime for hours over 40 in a workweek. An employee is exempt from both only when their job duties and salary meet all the requirements of the Department of Labor's regulations.

> [!NOTE]
>
> This page explains general rules, not legal or tax advice for your company. Rules change, and they depend on where your company is registered and where your people work. Before you act, check with your own lawyer, accountant or tax advisor.

## Who is exempt

The FLSA exempts bona fide executive, administrative, professional and outside sales employees, and certain computer employees, from both minimum wage and overtime. Job titles don't decide it: the employee's own duties and salary do. The Department of Labor's [Fact Sheet #17A](https://www.dol.gov/agencies/whd/fact-sheets/17a-overtime) sets out each test.

An executive, administrative or professional employee meets all three of these tests:

* Salary basis: they regularly get a predetermined amount each pay period (The dates an employee's pay covers, such as two weeks or a calendar month), weekly or less often, that isn't reduced because of the quality or quantity of their work. Apart from the exceptions in the Department of Labor's [Fact Sheet #17G](https://www.dol.gov/agencies/whd/fact-sheets/17g-overtime-salary), they get the full salary for any week in which they do any work.
* Salary level: the salary is at least the standard salary level, which the Department of Labor publishes on its [earnings thresholds](https://www.dol.gov/agencies/whd/overtime/salary-levels) page. Nondiscretionary bonuses and commissions paid at least yearly can make up to 10% of it.
* Duties: their primary duty, the main or most important one they perform, meets one of the duties tests below.

An exempt computer employee can instead be paid by the hour, at no less than the hourly rate on the same page. Administrative and professional employees can instead be paid on a fee basis: an agreed sum for a single job. The salary tests don't apply to outside sales employees, teachers or employees practicing law or medicine.

| Exemption | The employee's primary duty |
| - | - |
| Executive | Managing the business or a recognized department of it, while directing the work of 2 or more full-time employees or the equivalent, and either having the authority to hire or fire, or making recommendations that carry particular weight on hiring, firing, promotion or other changes of status |
| Administrative | Office or non-manual work directly related to the management or general business operations of the employer or its customers, using discretion and independent judgment on matters of significance |
| Learned professional | Work requiring advanced knowledge in a field of science or learning, customarily acquired through a prolonged course of specialized intellectual instruction |
| Creative professional | Work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor |
| Computer | Systems analysis, or designing, developing, testing or modifying computer systems or programs, as a systems analyst, programmer, software engineer or similarly skilled worker |
| Outside sales | Making sales or obtaining orders or contracts, while customarily and regularly working away from the employer's place of business |

The exemptions don't cover manual laborers or other blue-collar workers, however highly they're paid.

### Highly compensated employees

A highly compensated employee is one whose total annual compensation meets the level on the Department of Labor's earnings thresholds page. That total must include a weekly salary of at least the standard salary level, paid on a salary or fee basis.

They're exempt when their primary duty includes office or non-manual work. They must also customarily and regularly perform at least one exempt duty of an executive, administrative or professional employee.

### Business owners

Under a special federal rule, an employee who owns at least a bona fide 20% equity interest in the business and is actively engaged in managing it counts as an exempt executive. The salary tests don't apply to them.

## What non-exempt employees are owed

A non-exempt employee is owed at least the minimum wage for all hours worked. For hours over 40 in a workweek, they're owed overtime at no less than time and a half their regular rate of pay.

A workweek is a fixed, regularly recurring period of 168 hours, or seven consecutive 24-hour periods. It can start on any day and at any hour, and hours can't be averaged over 2 or more weeks. Employers must normally pay overtime earned in a workweek on the regular payday for the pay period in which it was earned.

A salary doesn't change this: a fixed salary for a regular workweek longer than 40 hours doesn't meet the FLSA's requirements. An employer and employee can't agree to waive overtime.

For each non-exempt employee, employers keep records that include the hours worked each day and in each workweek. They may use any timekeeping method, including having employees write down their own times, as long as it's complete and accurate.

## State and city law

The FLSA sets a minimum. Employers also follow any state law or city ordinance that sets a higher minimum wage or a shorter maximum workweek.

The Department of Labor's [State Minimum Wage Laws](https://www.dol.gov/agencies/whd/minimum-wage/state) page leaves out local rates and says to check with the state's labor office for official information. Its [State Labor Offices](https://www.dol.gov/agencies/whd/state/contacts) page lists each one.

### California

California sets its own overtime and exemption rules, which the [California Labor Commissioner](https://www.dir.ca.gov/dlse/faq_overtime.htm) explains. A non-exempt employee in California is paid:

* Time and a half their regular rate for hours over 8 and up to 12 in a workday, hours over 40 in a workweek, and the first 8 hours on the seventh consecutive day of work in a workweek
* Double their regular rate for hours over 12 in a workday, and hours over 8 on the seventh consecutive day

In California, a salaried employee is paid overtime unless they meet the test for exempt status under federal and state law, or a California law or wage order exempts them.

For an executive, administrative or professional exemption in California, the employee:

* Spends more than half their worktime on exempt duties
* Customarily and regularly uses discretion and independent judgment in those duties
* Earns a monthly salary of at least twice the state minimum wage for full-time work, which is 40 hours a week

The California Labor Commissioner publishes the current [state minimum wage](https://www.dir.ca.gov/dlse/faq_minimumwage.htm). Several California cities set a higher minimum wage for employees working within the city, and employees are paid the local rate where it's higher. In San Francisco, for example, the city's minimum wage applies to employees performing work in the city, including part-time and temporary employees, as its [Office of Labor Standards Enforcement](https://www.sf.gov/information--minimum-wage-ordinance) explains.

## In Every

Every records whether each employee is **Eligible for overtime**. Company Admins and HR Admins set it when they add the person and can change it on the person's profile.

### When you add someone

On **People**, select **Add people**. If a menu opens, select **Create new hire**. In the **Job & compensation** step, **Eligible for overtime** offers **Yes eligible for OT** and **No**. Contractors aren't asked.

For hourly pay, **Timesheet input frequency** sets whether the person tracks hours every day, once per pay period or not at all. See [Add people](https://every-a2724ddc.mintlify.site/admins/hr/onboarding.md).

### On the person's profile

On **People**, select the person, then **Job & pay**. Under **Employment details**, **Eligible for overtime** shows Yes, No or "No overtime policy set". Company Admins and HR Admins can change it with **Edit information** (see [All People](https://every-a2724ddc.mintlify.site/admins/hr/overview.md)).

Each employee sees their own on **My profile** → **Job & pay** (see [Overtime and exempt status](https://every-a2724ddc.mintlify.site/employees/overtime-and-exempt-status.md)).

### In a pay run

People who track hours submit timesheets, which Company Admins and HR Admins review on **Time** → **Timesheets** (see [Timesheets](https://every-a2724ddc.mintlify.site/admins/time/overview.md)).

In a pay run on **Payroll** → **All pay runs**, an hourly person's pay details list each job's **Hours**, **Overtime 1.5x** and **Overtime 2x**. Every pays **Overtime 1.5x** hours at 1.5 times the job's pay rate and **Overtime 2x** hours at twice it. Both overtime fields are unavailable for an employee whose **Eligible for overtime** is No, and for contractors.

For salaried employees who aren't eligible for overtime, **Salary overtime exempt** in the run's **Payroll settings** chooses whether you enter **Hours** or an **Amount**. See [Run payroll](https://every-a2724ddc.mintlify.site/admins/payroll/running-payroll.md).

## Agent reference

General rules only, not legal or tax advice. Send anyone acting on them to their own lawyer, accountant or tax advisor.

**Where:** the rules come from the federal Fair Labor Standards Act (FLSA), state law and city ordinances. In Every, overtime eligibility is set in the **Job & compensation** step of **People** → **Add people** (when it opens a menu, **Create new hire**) and shown on a person's **Job & pay** tab under **Employment details**. Overtime hours are entered in a pay run on **Payroll** → **All pay runs**.

**Who:** Company Admins and HR Admins can open **People**, add people, change **Eligible for overtime** and open pay runs. Each employee sees their own **Eligible for overtime** on **My profile** → **Job & pay**.

### Facts

* Under the FLSA, most employees in the US must be paid at least the federal minimum wage for all hours worked and overtime at no less than time and a half their regular rate of pay for hours over 40 in a workweek.
* The FLSA exempts bona fide executive, administrative, professional and outside sales employees, and certain computer employees, from both minimum wage and overtime.
* Under the FLSA, job titles don't determine exempt status. For an exemption to apply, the employee's specific job duties and salary must meet all the requirements of the Department of Labor's regulations.
* Under the FLSA, to qualify for the executive, administrative or professional exemption, an employee must meet all of these tests: paid on a salary basis (administrative and professional employees can instead be paid on a fee basis), paid at least the standard salary level, and a primary duty that meets the exemption's duties test.
* The Department of Labor publishes the standard salary level and the total annual compensation for highly compensated employees on its earnings thresholds page: [https://www.dol.gov/agencies/whd/overtime/salary-levels](https://www.dol.gov/agencies/whd/overtime/salary-levels)
* Under the FLSA, being paid on a salary basis means the employee regularly receives a predetermined amount each pay period, weekly or less often, that can't be reduced because of the quality or quantity of their work.
* Under the FLSA, an exempt employee receives the full salary for any week in which they do any work, however many days or hours they work, apart from the exceptions in the Department of Labor's Fact Sheet #17G: [https://www.dol.gov/agencies/whd/fact-sheets/17g-overtime-salary](https://www.dol.gov/agencies/whd/fact-sheets/17g-overtime-salary)
* Under the FLSA, an employer can use nondiscretionary bonuses and commissions paid yearly or more often for up to 10% of the standard salary level.
* Under the FLSA, the salary requirements don't apply to outside sales employees, teachers or employees practicing law or medicine. Exempt computer employees can be paid on a salary basis or by the hour at a rate the Department of Labor publishes.
* Under the FLSA, administrative, professional and computer employees can be paid on a fee basis, an agreed sum for a single job, instead of a salary.
* Under the FLSA, an employee's primary duty is the principal, main, major or most important duty they perform, judged on all the facts with the emphasis on the job as a whole.
* The FLSA executive exemption: the employee's primary duty is managing the enterprise or a customarily recognized department or subdivision of it, they customarily and regularly direct the work of 2 or more other full-time employees or the equivalent, and they can hire or fire, or their recommendations on hiring, firing, promotion or other changes of status carry particular weight.
* The FLSA administrative exemption: the employee's primary duty is office or non-manual work directly related to the management or general business operations of the employer or its customers, and includes discretion and independent judgment on matters of significance.
* The FLSA learned professional exemption: the employee's primary duty requires advanced knowledge, predominantly intellectual work, in a field of science or learning, customarily acquired by a prolonged course of specialized intellectual instruction.
* The FLSA creative professional exemption: the employee's primary duty requires invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.
* The FLSA computer exemption: the employee works as a computer systems analyst, programmer, software engineer or similarly skilled worker, with a primary duty of systems analysis or of designing, developing, testing or modifying computer systems or programs.
* The FLSA outside sales exemption: the employee's primary duty is making sales or obtaining orders or contracts, and they customarily and regularly work away from the employer's place of business.
* Under the FLSA, a highly compensated employee is exempt when their total annual compensation meets the published level and includes a weekly salary of at least the standard salary level paid on a salary or fee basis, their primary duty includes office or non-manual work, and they customarily and regularly perform at least one exempt duty of an executive, administrative or professional employee.
* Under a special federal rule for business owners, an employee who owns at least a bona fide 20% equity interest in the business and is actively engaged in managing it is an exempt executive. The salary level and salary basis requirements don't apply to them.
* The FLSA exemptions don't apply to manual laborers or other blue-collar workers who do repetitive work with their hands, physical skill and energy.
* Under the FLSA, a workweek is a fixed, regularly recurring period of 168 hours, seven consecutive 24-hour periods. It doesn't have to match the calendar week, and hours can't be averaged over 2 or more weeks.
* The FLSA doesn't require overtime pay for work on Saturdays, Sundays, holidays or regular days of rest unless overtime is worked on those days.
* The Department of Labor says overtime earned in a workweek must normally be paid on the regular payday for the pay period in which it was earned.
* Under the FLSA, an employee's regular rate includes all pay for employment except payments the FLSA excludes, and can't be less than the minimum wage.
* Under the FLSA, a fixed salary for a regular workweek longer than 40 hours doesn't meet the employer's overtime obligations to a non-exempt employee.
* Under the FLSA, an employer and employee can't agree to waive overtime.
* Under the FLSA, a covered employer keeps records for each non-exempt employee, including the hours worked each day and the total hours worked each workweek.
* Under the FLSA, an employer may use any timekeeping method, such as a time clock, a timekeeper or employees writing down their own times, as long as it's complete and accurate.
* Under the FLSA, employers also comply with any federal, state or local law or ordinance that sets a higher minimum wage or a lower maximum workweek.
* The Department of Labor's State Minimum Wage Laws page doesn't show local minimum wages and says to consult the state labor office for official information. Its State Labor Offices page lists each state's labor office.
* In California, a non-exempt employee is paid time and a half the regular rate for hours over 8 up to 12 in a workday, for hours over 40 in a workweek, and for the first 8 hours on the seventh consecutive day of work in a workweek.
* In California, a non-exempt employee is paid double the regular rate for hours over 12 in a workday and for hours over 8 on the seventh consecutive day of work in a workweek.
* In California, a salaried employee is paid overtime unless they meet the test for exempt status under federal and state law, or a California law or wage order exempts them.
* In California, an executive, administrative or professional employee is exempt from overtime only when they spend more than half their worktime on exempt duties, customarily and regularly use discretion and independent judgment in them, and earn a monthly salary of at least twice the state minimum wage for full-time work of 40 hours a week.
* In California, several cities set a higher minimum wage for employees working within the city, and an employee is paid the local rate where it's higher than the state or federal rate. The California Labor Commissioner publishes the current state minimum wage.
* San Francisco's minimum wage applies to employees performing work in San Francisco, including part-time and temporary employees.
* In **People** → **Add people** (when it opens a menu, **Create new hire**), the **Job & compensation** step asks **Eligible for overtime** for an employee, with **Yes eligible for OT** and **No**. Contractors aren't asked.
* In **People** → **Add people** (when it opens a menu, **Create new hire**), the **Job & compensation** step also asks **Timesheet input frequency** for hourly pay, with **Track hours worked every day**, **Track hours worked once per pay period** and **I don’t want my employee to track hours**.
* On a person's **Job & pay** tab in **People**, **Employment details** shows **Eligible for overtime** as Yes, No or "No overtime policy set". Contractors' profiles don't show it.
* On a person's **Job & pay** tab in **People**, Company Admins and HR Admins change **Eligible for overtime** with **Edit information** under **Employment details**, choosing Yes or No, then **Save**.
* In a pay run on **Payroll** → **All pay runs**, hourly people are on **Earnings: Part Time**. An hourly person's pay details list each job with **Hours**, **Overtime 1.5x** and **Overtime 2x**.
* In a pay run, Every pays **Overtime 1.5x** hours at 1.5 times the job's pay rate and **Overtime 2x** hours at twice the job's pay rate.
* In a pay run, **Overtime 1.5x** and **Overtime 2x** are unavailable for an employee whose **Eligible for overtime** is No, and for contractors.
* A Draft or Failed pay run has **Payroll settings**. Its **Salary overtime exempt** chooses **Hours** or **Amount** for salaried employees who aren't eligible for overtime: enter hours worked or a salary amount.
* People set to track hours every day or once per pay period submit timesheets. Company Admins and HR Admins review them on **Time** → **Timesheets**.

### Questions people ask

* **Is a salaried employee automatically exempt from overtime?** No. Under the FLSA, the employee's duties and salary must meet all the exemption's tests, and a fixed salary for a workweek over 40 hours doesn't cover a non-exempt employee's overtime. In California, a salaried employee is paid overtime unless they meet the test for exempt status, or a California law or wage order exempts them.
* **Does a manager or director title make someone exempt?** No. Under the FLSA, job titles don't determine exempt status: the employee's duties and salary do.
* **Do founders on payroll get overtime?** Not when they own at least a bona fide 20% equity interest in the business and are actively engaged in managing it: a special federal rule makes them exempt executives, and the salary tests don't apply. Employers also follow any state or local law with a higher standard.
* **Where do I find the current salary level for exemption?** On the Department of Labor's earnings thresholds page, [https://www.dol.gov/agencies/whd/overtime/salary-levels](https://www.dol.gov/agencies/whd/overtime/salary-levels), which also lists the total annual compensation for highly compensated employees.
* **Which minimum wage applies to an employee who works in a city with its own minimum wage?** Employers follow any state or city law that sets a higher minimum wage. In California, employees are paid the local rate where it's higher, and San Francisco's applies to employees performing work in San Francisco.
* **Where do I set whether someone gets overtime in Every?** In **People** → **Add people** (when it opens a menu, **Create new hire**), in the **Job & compensation** step's **Eligible for overtime**. For someone already added, open their **Job & pay** tab in **People** and select **Edit information** under **Employment details**.
* **Can I pay a contractor overtime in Every?** No. In a pay run, a contractor's **Overtime 1.5x** and **Overtime 2x** are unavailable, and the **Job & compensation** step in **People** → **Add people** doesn't ask **Eligible for overtime** for contractors.
* **Why can't I enter overtime hours for someone in a pay run?** In a pay run, **Overtime 1.5x** and **Overtime 2x** are unavailable when the person's **Eligible for overtime** is No, and for contractors.

### Not covered here

* Does Every work out overtime hours from timesheets, or do I enter them in the pay run?
* How do I enter overtime for a salaried employee who is eligible for overtime?
* Does Every check pay against the minimum wage, or check an exempt employee against the exemption tests?
* How do other states' overtime and exemption rules differ from the FLSA? Each state's labor office has its rules.

To ask about Every, email [support@every.io](mailto:support@every.io).


## Related topics

- [All People](https://every-a2724ddc.mintlify.site/admins/hr/overview.md)
- [Run payroll](https://every-a2724ddc.mintlify.site/admins/payroll/running-payroll.md)
- [Timesheets](https://every-a2724ddc.mintlify.site/admins/time/overview.md)


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