Are Your Salaried Employees Entitled to Overtime?

As a business owner, your company may often require a dedicated team that goes beyond the standard 40-hour work week. A common misconception among local business owners is that paying someone a flat salary automatically removes the requirement to pay overtime. In reality, Florida follows the strict federal guidelines of the Fair Labor Standards Act (FLSA), which means many salaried workers still qualify for extra pay. This article explains Florida’s overtime rules and explores how to correctly classify your staff to avoid costly payroll errors. 

I often meet with employers who believe that a “Salary” title acts as a shield against overtime claims. But the law looks at more than just the method of payment. To deny overtime pay, an employee must meet specific criteria defined by the U.S. Department of Labor (DOL). If an employee earns a salary but does not meet the “duties test” or the “salary threshold,” they are likely non-exempt.

In Florida, there is no separate state overtime law that overrides federal standards. Instead, we look to 29 U.S.C. § 207, which mandates that non-exempt employees receive at least one and one-half times their regular rate of pay for any hours worked over 40 in a workweek.

Understanding the 2026 Salary Thresholds

One of the most critical updates for 2026 involves the minimum salary an employee must earn to even be considered for an exemption. While federal rules previously attempted to raise these thresholds significantly, a 2024 court ruling vacated the proposed increases. As of early 2026, the federal salary threshold for executive, administrative, and professional exemptions remains at the established level of $684 per week, which totals $35,568 annually.

If you pay a salaried employee less than this amount, they are generally entitled to overtime pay regardless of their job title. It is also important to note that the “Highly Compensated Employee” threshold remains at $107,432 per year. You can find detailed breakdowns of these figures on the U.S. DOL Wage and Hour Division website.

What Is The Three-Part Test for Overtime Exemption?

To safely classify a salaried employee as exempt from overtime in Central Florida, they must typically pass three distinct tests. Missing even one of these can result in a misclassification that leads to back-pay audits.

• The Salary Basis Test: The employee must receive a predetermined and fixed salary that does not decrease based on the quality or quantity of work performed.
• The Salary Level Test: As mentioned above, the salary must meet the minimum threshold of $684 per week under current enforcement.
• The Duties Test: This is the most complex part. The employee’s primary duties must involve high-level work, such as managing a department, exercising independent judgment on significant business matters, or performing work requiring advanced knowledge in a field of science or learning.

The DOL Fact Sheet #17A provides a comprehensive look at these specific duties.

Florida’s Minimum Wage and the Regular Rate

Even though Florida uses federal overtime rules, our state’s minimum wage creates a unique floor for payroll calculations. As of April 2026, Florida’s minimum wage is $14.00 per hour. Under Florida Statute § 448.110, the wage is scheduled to rise to $15.00 per hour on September 30, 2026.

When you calculate overtime for a non-exempt salaried employee, you cannot just use the minimum wage. You must determine their “regular rate” by taking their total weekly salary and dividing it by the hours they were intended to work. For example, if a salaried employee in Volusia County earns $600 for a 40-hour week, their regular rate is $15 per hour. Their overtime rate would be $22.50 per hour.

What Are Some Common Compliance Risks for Small Businesses In Florida?

Many well-intentioned owners in the Daytona Beach and Orlando areas fall into “comp time” traps. In the private sector, you generally cannot give an employee “time off” in a future week to avoid paying overtime in the current week. Overtime is calculated on a single workweek basis.

Another risk involves “off-the-clock” work. If your salaried, non-exempt assistant answers emails from their home in Port Orange on a Saturday, that time counts toward their 40-hour limit. If they go over 40 hours, you owe them overtime. Because Florida has a strong legal climate for wage and hour litigation, these small oversights can lead to significant lawsuits.

How Can Employers Develop a Proactive Payroll Strategy?

To stay compliant, I recommend that small business owners conduct an internal audit of their job descriptions. Do not rely on a title like “Manager” or “Supervisor.” Instead, document the actual percentage of time an employee spends on high-level decision-making versus manual or clerical tasks.

If you find that an employee’s duties do not truly meet the exemption criteria, it may be safer to reclassify them as non-exempt. You can still pay them a salary, but you must track their hours and pay the overtime premium when they work late. This transparency protects your business from future claims.

How Does Legal Review Protect Your Business Interests?

Employment laws are rarely static. Between shifting federal thresholds and Florida’s annual minimum wage increases, staying current is a full-time job. Lead attorney, Melody Lankford, helps Central Florida business owners identify these risks before they turn into formal complaints or federal investigations. Whether you are drafting a new employee handbook or evaluating a specific position’s exempt status, having clear legal guidance is your best defense.

Lankford Law Firm understands the pressure of growing a business while trying to manage a team fairly. Take the first steps to simplify these complex regulations so you can focus on your operations with confidence.

Schedule an Initial Consultation To Protect Your Business

If you are unsure whether your salaried employees are classified correctly, or if you need help updating your payroll policies to reflect current 2026 standards, Lankford Law Firm is here to assist. Get tailored advice for employers throughout the Central Florida region today.

Contact an experienced business lawyer at 386-866-2126 to ensure your business remains compliant with all state and federal overtime laws.