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Exempt From Overtime Under Federal Labor Law

By Amy E. Feldman

PHILADELPHIA (CBS) - Can you accept a higher salary in exchange for not receiving overtime?

A Pittsburgh restaurant made headlines for banning tips - and its wait staff was thrilled.

The restaurant, which decided to pay waiters a salary of $35,000 per year and give vacation days with the understanding that their employees would not work more than 44 hours per week, was inundated with resumes. Which is why it seems kind of mean to point out that their policy doesn't meet Federal labor law requirements.

Why? Because just because an employee is salaried doesn't mean he doesn't also get overtime for the hours he works in excess of forty in a week, unless the worker is considered exempt.

And, while there are several different exemptions under the law, in order to be exempt - which means, not to be entitled to time and a half your regular hourly rate for hours over forty - in general you have to exercise discretion and independent judgment.

And, a restaurant worker on a shift who shows up and leaves when he's told isn't really exercising discretion and independent judgment, so even though the restaurant is making great efforts to be fair, the worker should be getting time and a half for those extra four hours. Check, please.

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