Tennessee Overtime Laws for Salaried Employees: Exemptions and Tests

Tennessee has no state overtime statute, so overtime for salaried employees in Tennessee is governed entirely by the federal Fair Labor Standards Act. Under the FLSA, a salaried worker is owed time-and-a-half for every hour over 40 in a workweek unless the employer can prove three separate things: that the salary is high enough, that it is paid the right way, and that the actual job duties fit a recognized exemption. Miss any one of those, and the exemption fails and overtime is owed.¹

The burden sits with the employer, not the worker. A job title, an offer letter that says “exempt,” or a payroll code does not make anyone exempt. What matters is the salary, the pay structure, and the work you actually do.

The Three Tests That Decide Whether You Get Overtime

To keep a salaried worker off overtime, an employer has to satisfy all three of the following. If any one fails, the worker is non-exempt and every hour past 40 earns time-and-a-half.

Salary Level

You must earn at least $684 per week, or about $35,568 per year.² Anyone paid less than that is automatically entitled to overtime, no matter what their job looks like. A separate, higher threshold of $107,432 per year applies to the “highly compensated” shortcut discussed below.

Employers may count nondiscretionary bonuses, incentive payments, and commissions toward up to 10 percent of the weekly salary requirement, as long as those payments are made at least annually. If the total falls short at year-end, the employer has one additional pay period to make it up.³

Salary Basis

Being paid enough is not the same as being paid on a salary basis. Your pay must be a fixed, predetermined amount each pay period that does not go up or down based on the quantity or quality of the work you did that week.⁴ If your check shrinks because business was slow, or because you left early one afternoon, the salary basis is compromised.

Employers can dock an exempt worker’s pay for full-day personal absences and for full-day disciplinary suspensions imposed under a written workplace conduct policy. Deductions are also allowed for penalties tied to serious safety violations.⁵ What they cannot do is dock pay for partial-day absences. If an exempt employee works any part of a day, the full day’s pay is owed.⁴ A pattern of improper deductions can defeat the exemption entirely, opening the door to back overtime for the affected employee and often for others in the same role.

Job Duties

Clearing the salary and salary-basis tests still isn’t enough. Your day-to-day work has to fit one of the specific duties categories below. Titles and org charts don’t decide this. What you spend your time doing does.

The Duties Exemptions

Executive

Your primary duty must be managing the business or a recognized department. You must regularly direct the work of at least two full-time employees and have genuine authority over hiring and firing, or your input on those decisions must carry real weight.⁶ A shift lead who works the same tasks as the crew and has no real say in staffing is not exempt under this category, even if the title says “manager.”

Administrative

The administrative exemption covers office or non-manual work directly related to running the business, such as finance, human resources, marketing, or compliance roles. The second requirement is where employers most often stumble: the employee has to exercise real discretion and independent judgment on significant matters.⁷ Following a manual or applying set rules to routine situations is not the kind of judgment this exemption requires.

Professional

The learned professional exemption applies to work requiring advanced knowledge in a field such as medicine, law, engineering, or accounting, acquired through an extended course of specialized education. Doctors, lawyers, and licensed pharmacists are typical examples.⁸ A separate creative professional exemption covers work that depends on invention, imagination, or originality in a recognized artistic field.

Computer Employees

This one covers workers whose primary duty is systems analysis, software design, or programming. Hardware repair technicians and employees who merely use computers as tools do not qualify.⁹ Computer employees can qualify by meeting the standard $684 weekly salary or by earning at least $27.63 per hour.

Outside Sales

Outside sales employees are exempt if their primary duty is making sales or obtaining contracts away from the employer’s place of business.¹⁰ A fixed office or a home used as a base for phone sales counts as the employer’s location, so remote telemarketers don’t fit. The outside sales exemption has no minimum salary requirement.

Highly Compensated Employees

Workers earning at least $107,432 per year face a lighter duties test.² Instead of meeting the full executive, administrative, or professional test, they only need to regularly perform at least one exempt duty from any of those categories. The work must still be office or non-manual in nature, so a highly paid foreman who personally runs heavy equipment is not covered by this shortcut.¹¹

“Primary duty” doesn’t come down to a strict hours percentage. Spending more than half your time on exempt work is a strong indicator, but the DOL also weighs the relative importance of different duties, your freedom from direct supervision, and how your salary compares to non-exempt workers doing similar work.¹²

How Overtime Is Calculated for a Salaried Non-Exempt Worker

If you’re salaried but non-exempt, you still get your fixed paycheck and overtime is added on top. The starting point is your regular hourly rate, found by dividing your weekly pay by the number of hours the salary is meant to cover.¹³ For most salaried workers hired for a standard 40-hour week, that means dividing by 40. A $900 weekly salary yields a $22.50 regular rate, and each overtime hour then pays $33.75. Work 46 hours in a week and you’d receive your $900 salary plus $202.50 in overtime.

Watch how the salary is defined. If your salary is understood to cover more than 40 hours, the math shifts against you. An employee hired to work 45 hours per week for a $450 salary has a regular rate of $10 per hour, not $11.25.¹⁴ If your offer letter or agreement doesn’t spell out which hours the salary covers, an employer will struggle to argue it covers anything beyond a normal 40-hour week.

What to Do If You’re Owed Overtime

Start with your own records. Employers are required to keep detailed hour and pay records for non-exempt workers, but if those records are missing or incomplete, courts will often let employees reconstruct their hours from reasonable estimates and shift the burden to the employer to disprove them.¹⁵ Keep pay stubs, timesheets, schedules, and any texts or emails about hours worked.

You then have two ways to pursue a claim. You can file a complaint with the U.S. Department of Labor’s Wage and Hour Division online or by calling 1-866-487-9243, and the WHD will investigate and can recover back wages on your behalf.¹⁶ Or you can file a private lawsuit, which is often the better route when the amounts are large, because a successful plaintiff can recover attorney’s fees on top of damages.

Damages can double. An employer who violates the overtime rules owes the unpaid overtime plus an equal amount in liquidated damages.¹⁷ Ten thousand dollars in back overtime can translate into a $20,000 judgment before attorney’s fees and costs.

Deadlines are strict. You generally have two years from each underpayment to file. If the violation was willful, meaning the employer knew or showed reckless disregard for whether its practices were legal, the window stretches to three years.¹⁸ Each paycheck starts its own clock, so waiting quietly costs you weeks of recovery even if the overall claim is still timely.

Protection Against Retaliation

It is illegal for an employer to fire, demote, cut hours, or otherwise punish you for raising an overtime complaint. The protection covers written and verbal complaints, and most courts extend it to internal complaints made to your own employer, not only formal government filings. It also reaches former employers who retaliate after you’ve left the job.¹⁹

If retaliation happens, available remedies include reinstatement, lost wages, and liquidated damages equal to those lost wages. A retaliation claim can be pursued through the Wage and Hour Division or in a private lawsuit, and it stands independent of the underlying overtime dispute.¹⁹

1
Office of the Law Revision Counsel. 29 U.S. Code 207 – Maximum Hours
2
U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption from Minimum Wage and Overtime Protections Under the FLSA
3
eCFR. 29 CFR 541.602 – Salary Basis
4
eCFR. 29 CFR 541.602 – Salary Basis
5
U.S. Department of Labor. FLSA Overtime Security Advisor – Deductions
6
U.S. Department of Labor. Fact Sheet 17B – Exemption for Executive Employees Under the Fair Labor Standards Act
7
U.S. Department of Labor. Fact Sheet 17C – Exemption for Administrative Employees Under the Fair Labor Standards Act
8
U.S. Department of Labor. Fact Sheet 17D – Exemption for Professional Employees Under the Fair Labor Standards Act
9
U.S. Department of Labor. Fact Sheet 17E – Exemption for Employees in Computer-Related Occupations Under the Fair Labor Standards Act
10
U.S. Department of Labor. Fact Sheet 17F – Exemption for Outside Sales Employees Under the Fair Labor Standards Act
11
eCFR. 29 CFR 541.601 – Highly Compensated Employees
12
eCFR. 29 CFR 541.700 – Primary Duty
13
U.S. Department of Labor. Fact Sheet 56A – Overview of the Regular Rate of Pay Under the Fair Labor Standards Act
14
U.S. Department of Labor. Fact Sheet 23 – Overtime Pay Requirements of the FLSA
15
U.S. Department of Labor. Fact Sheet 21 – Recordkeeping Requirements Under the Fair Labor Standards Act
16
Worker.gov. Filing a Complaint with the U.S. Department of Labor’s Wage and Hour Division
17
Office of the Law Revision Counsel. 29 U.S. Code 216 – Penalties
18
Office of the Law Revision Counsel. 29 U.S. Code 255 – Statute of Limitations
19
U.S. Department of Labor. Fact Sheet 77A – Prohibiting Retaliation Under the Fair Labor Standards Act