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Indiana Exempt Employee Comp Time

Posted by Tamara

Many Indiana exempt employees wonder if they are automatically entitled to comp time when they work more than 40 hours in the payroll week. The answer is “no.”

Under both federal and Indiana law, an exempt employee can be required to work more than 40 hours per week without any increase in compensation. The exempt employee who works 30 hours per week is (usually) entitled to his or her entire weekly salary. However, the exempt employee who works 60, 80 or even 120 hours per week is still entitled only to his or her weekly salary.

Nor is there any requirement that the employee must be granted “comp time” or compensatory paid time off to be used in another payroll week. The employer can legitimately require that an exempt employee work 60 or 80 hours per week, every week and discipline or terminate any employee who fails to meet that standard.

A salaried employee in Indiana can be either exempt or non-exempt, depending upon the employee’s primary duties. Under the federal FLSA or Fair Labor Standards Act, there are five classes of exempt employees: Executives, Outside Salespeople, Computer Pros, Professionals and Administrators.

Exempt employees must be paid a salary of at least $455 per week, under the FLSA. Any employee who earns less is non-exempt. In addition, the employee must be paid the same weekly salary, even during weeks when he or she works fewer hours. (There are certain exceptions under FMLA and ADA.) An exempt employee who is ready, willing and able to work the entire week must be paid for the full week, even if the employer has few hours available.

If the employee’s salary is reduced during weeks in which he or she works fewer hours, the employee is automatically non-exempt and entitled to overtime when he or she works more than 40 hours per week.

It is not legal for a private Indiana business to grant comp time instead of paying overtime to non-exempt employees. (It is legal for some agencies of state and local governments, to grant comp time in lieu of paying overtime.)

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