A common misconception among employers is that they do not have to pay salaried employees overtime compensation. This is not entirely accurate. Unless a salaried employee falls under one of Illinois’ delineated exemptions, salaried employees are required to receive overtime.

The Illinois Minimum Wage Law states that “No employer shall employ any of his employees for a workweek of more than 40 hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than 1 ½ times the regular rate at which he is employed.” This language is very broad and encompasses all employees, including salaried ones.

Fortunately, the Illinois Minimum Wage Law also provides exemptions for salaried employees. These exemptions are:

1. Non-manufacturer salesmen or mechanics selling or servicing automobiles, trucks or farm implements to ultimate purchasers or consumers;
2. Non-manufacturer salesmen selling trailers, boats, or aircraft to ultimate purchasers;
3. Employers of agricultural labor with respect to agricultural employment;
4. Certain employees of governmental bodies;
5. Certain commissioned employees;
6. Certain employees working under worktime exchange agreements;
7. Certain employees of not-for-profit educational or residential child care institutions;
8. Certain employees employed as crew members on uninspected towing vessels; and
9. Any employee employed in a bona fide executive, administrative, or professional capacity.

If you have a salaried employee that falls into one of these exemptions, you may not be required to pay them overtime. However, the conditions under which one of these exemptions may apply can be complicated and should be closely reviewed to ensure that a given employee does, in fact, qualify for the exemption.

Further steps employers can take to ensure they are in compliance with Illinois’ Minimum Wage Law as it applies to overtime compensation include, but are not limited to: having salaried employees register their time the same as hourly employees; have written employment agreements with all employees (but particularly salaried ones) that clearly spell out the employee’s duties; and keep all time and payments records for all employees for three years, as required by Illinois law.

Finally, if you have any questions regarding whether a salaried employee is entitled to overtime pay, contact the attorneys at Lavelle Law, Ltd. who have experience dealing with the Illinois Department of Labor and determining whether given employees are exempt from overtime compensation. You can reach me at lziebell@lavellelaw.com or at (847) 705-7555.