Exempt Employees May Receive Overtime Pay

January 5, 2004

Margellius Anunobi worked as a salaried pharmacist for Eckerd and was classified as an exempt professional employee under the Fair Labor Standard Act's (FLSA) white collar exemption. Anunobi challenged his exempt status and sued Eckerd to recover unpaid overtime compensation.

One of the key facts relied on by Anunobi was Eckerd's practice of paying premium pay to exempt employees; specifically, Eckerd paid $5.00 per hour for each hour worked in excess of 40 in a given workweek. Anunobi contended this extra hourly-based payment was inconsistent with salary-basis compensation and defeated his exempt status under the FLSA. The trial court disagreed and held that an employer's payment of "premium pay" for overtime hours does not negate an employee's salary status. Accordingly, employers should now feel free to reward their salaried employees with additional hourly-based compensation without fear that those payments will defeat the white collar exemption.

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