If a salaried employee is near retirement age and wants to reduce their hours but then works over 40 hours, do we have to pay them overtime premiums?

UPDATED: Sep 30, 2022

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If a salaried employee is near retirement age and wants to reduce their hours but then works over 40 hours, do we have to pay them overtime premiums?

We are an RD firm in Michigan that has several full-time salary employees close to retiring and want to reduced their hours to 24-32 hours/week. If by choice they help a project and work over 40 hours, do we have to pay them OT premiums? They do not want/need the overtime premium monies. They are engineers and paying them OT would put them over their normal salary pay.

Asked on November 1, 2016 under Employment Labor Law, Michigan


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

If they shift to being paid hourly, then you *must* (it's the law; the employees can't opt out of it) pay overtime if they work more than 40 hours in a week. If they are paid salaried (and the salary meets the threshold; see below), they are only overtime eligible if they don't meet one or more the "tests" or criteria for exemption, such as the executive (or managerial) exemption, the administrative exemption, or most relevant for engineers (they most likely meet it) professional exemption, all of which you can find on the U.S. Dept. of Labor website. If the are salaried, meet the salary threshhold, and their job/duties meet one or more of the exemptions, they do not get overtime.
Note that in January, the salary threshhold rises to $47,476 on December 1, 2016--that is, any salaried employee making less than that annually *will* receive overtime.

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