HR Q&A – Can a Non Exempt Employee Be Paid a Salary?

The short answer is yes — but there’s an important catch.

Paying someone a salary does not automatically make them exempt from overtime rules. What matters under the Fair Labor Standards Act (FLSA) is the employee’s classification, not simply how they’re paid. Let’s walk through what that means in practice.

First, a Quick Refresher on Nonexempt Employees

A nonexempt employee is entitled to:

  • Minimum wage

  • Overtime pay (generally time and a half for hours worked over 40 in a workweek)

This applies regardless of whether the employee is paid hourly, by commission, or by salary.  Many people assume “salary” automatically means exempt. That’s one of the most common payroll misconceptions we see.

Yes — Nonexempt Employees Can Be Paid a Salary

An employer can choose to pay a nonexempt employee a fixed salary each week, as long as the employee still receives overtime when they work more than 40 hours in a workweek. Think of the salary as simply another way to deliver the employee’s regular pay.  The key requirement is that the employer must still track hours worked and calculate overtime properly.

Example 1: A Salaried Office Coordinator

Let’s say an office coordinator is classified as nonexempt and earns a salary of $800 per week.  If that employee works:

  • 40 hours → they receive the $800 salary

  • 45 hours → overtime must still be calculated

First, you determine the regular rate:

$800 ÷ 40 hours = $20 per hour

Then overtime is paid at time and a half:

$20 × 1.5 = $30 per hour

If the employee worked 5 overtime hours:

5 × $30 = $150 overtime pay

Total pay for the week would be $950.

Even though the employee receives a salary, overtime rules still apply.

Example 2: Retail Assistant Manager

A retail assistant manager might be paid $900 per week but still classified as nonexempt because their duties don’t meet the legal exemption tests. If they work 50 hours during a busy holiday week, the employer must still calculate and pay overtime for those additional 10 hours.  Again, the salary doesn’t eliminate overtime obligations.

Why Some Employers Use Salaried Nonexempt Pay

There are legitimate reasons employers choose this structure.  It can provide:

  • More consistent paychecks for employees

  • Simpler budgeting for employers

  • Stability during weeks when hours fluctuate slightly

However, the key is that hours must still be tracked accurately, and overtime must still be paid when required.

The Biggest Compliance Risk

Where employers run into trouble is assuming that a salary automatically makes someone exempt.  It doesn’t. To classify an employee as exempt from overtime, they must generally meet:

  1. A minimum salary threshold

  2. Specific job duty requirements (executive, administrative, or professional duties)

If those tests aren’t met, the employee remains nonexempt, even if they are paid a salary.

The Bottom Line

Yes, a nonexempt employee can absolutely be paid a salary. However, the employer must still:

  • Track hours worked

  • Pay overtime when required

  • Ensure the employee is properly classified under wage and hour laws

Getting those details right matters — not just for compliance, but for building trust with your team.

This blog does not constitute formal HR or legal advice and does not address state or local laws. Our HR Resource Center by Mineral offers further guidelines for this and many other topics. For a small additional fee you can also speak to a live HR Specialist. Contact your friendly APlus Payroll CSS for further information (including login details) or login here. Want to know how we can help your Payroll or Time & Labor process? Please contact us here. Consultation is friendly and free!