In The Legal Loop

Deena B. Rosendahl Esq.

Overtime/Time Records Do’s And Don’ts

by Deena B. Rosendahl, Esq.

Recently, I was speaking with a group of business owners about the need for keeping time records and who is, and isn’t exempt from this requirement. One business executive said, ‘I don’t ever have to worry about that, all my employees are paid a salary.’ Another said, ‘I don’t have to keep time records because my employees never work overtime.’ Wrong response! Why? Read on.

  1. Position, not method of pay matters:
    Your method of pay does not determine whether your employees are exempt or non-exempt from the overtime provisions of the Fair Labor Standards Act, rather, the position that employee holds with your company dictates whether they are eligible for overtime.
  2. Overtime is easier to prove, than disprove:
    Business owners with non-exempt employees are not only required by law to keep time records, but should keep time records to protect them from a wrongful claim filed by a disgruntled worker. For example, an employee can claim he/she was not paid overtime and does not have to do anything other than state they worked more than forty hours in the official work week and was not paid overtime. The business owner bears the burden of disproving this fact. Without time records, you have no way to definitively prove hours worked.

    So, how do you know what positions (remember: not people) at your company are exempt from overtime and are not required to keep time records at all? The most commonly used exemption categories are:

    • Executive ( e.g. CEO, President, COO, etc.)
    • Administrative
    • Professional (e.g. Lawyers, Accountants, etc.)
    • Certain commissioned sales employees
    • Outside sales employees
    • Computer professionals (e.g. IT professionals)
    • Salesmen, partsmen and mechanics employed by automobile dealerships
    • Certain seasonal and recreational establishment employees
    • Casual babysitters
    • Live-in domestic help

A word of caution

Don’t be fooled by these exemption titles. Each of these exemption categories has specific criteria that must be met in order for the exemption to apply. For example, the administrative exemption only applies if your employee is compensated by a salary of not less than $455 per week, and whose primary duty is the performance of office or non-manual work directly related to the management or general business operations and whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. This means your receptionist or secretary, whose job duties are limited to answering phones and typing letters (even if he/she is paid more than $455 per week), will NOT meet the exemption. While this position is certainly “administrative” and is engaged in office or non-manual work, the position does not entail tasks that include the exercise of that discretion and independent judgment regarding matters of significance. For this reason, a receptionist/secretary will likely not qualify for the administrative exemption and will have to keep time records.

A well written job description for each position at your company will clarify what positions are exempt from the overtime provisions of state and federal law.

In order to determine which of your company’s positions may qualify for an exemption, or for more information regarding job descriptions, overtime requirements and time records, contact Deena B. Rosendahl at 201-947-8855 or by email at

Kaufman, Semeraro and Leibman, LLP