A salary does not create a construction salaried overtime exemption. Under federal rules the employee must be paid on a salary basis, at or above the Department of Labor’s salary level, and hold a primary duty that meets an executive, administrative or professional test. Titles count for nothing. State law can be stricter, so ask employment counsel.
Project Engineer, salaried, exempt: so says the org chart. The week says something different: forty submittals logged and routed, a stack of RFIs chased, meeting minutes typed, quantities counted for a pay application somebody else approves, and fifty-six hours on site. Whether that person falls inside an overtime exemption depends on the week, and the org chart was never asked.
What does the overtime exemption actually require?
Three things at once under the federal rules: payment on a salary basis, a salary at or above the level the Department of Labor publishes, and a primary duty that fits the executive, administrative or professional test. Miss any one and overtime is owed for hours over 40 in a workweek.
The default is overtime. The Department of Labor’s overtime page states that, unless exempt, covered employees “must receive overtime pay for hours worked over 40 in a workweek” at “a rate not less than time and one-half.” The exemptions are carved out of that default in 29 CFR 541.
On October 13, 2026, the department’s earnings thresholds page listed the standard salary level as “$684 per week (equivalent to a $35,568 annual salary)” and the highly compensated employee threshold as $107,432 per year. Those figures have been through rulemaking and litigation before, so read the page and not this post.
Almost every salaried person on a contractor’s payroll clears $684 a week. That is the trap. The easy test is passed, the file is closed, and nobody reaches the hard one.
Salary basis is the second requirement. Fact Sheet 17G defines it as regularly receiving “a predetermined amount of compensation each pay period,” and warns that an employer “will lose the exemption if it has an ‘actual practice’ of making improper deductions.” Docking a salaried field employee for a rain day is a habit to put in front of counsel.
Then the duties. Fact Sheet 17A says it in six words: “Job titles do not determine exempt status.”
Which construction roles fail the duties test?
The roles with a professional-sounding title and a week of task work are where it tends to fail: project engineers, assistant superintendents, field engineers, junior estimators and project coordinators. Whether a given person is exempt turns on their actual primary duty, a fact question for counsel.
“Primary duty” has a definition. Section 541.700 calls it “the principal, main, major or most important duty that the employee performs.” The same section offers time as a guide (more than 50 percent on exempt work will generally satisfy it) and then adds that time alone “is not the sole test.”
| Role | Duties-test question to ask | Where it tends to fail |
|---|---|---|
| Project engineer | Does the work require advanced knowledge, or follow set procedures? | Degree held, week spent on routine processing |
| Assistant superintendent | Do they direct two or more of your full-time employees, with weight in hiring and firing? | Coordinates subcontractors, no say in staffing |
| Field engineer | Is the primary duty non-manual work with independent judgment? | Layout, quantities and as-builts to a set standard |
| Junior estimator | Do they decide anything that matters, or produce takeoff a senior estimator prices? | Skilled work, reviewed line by line |
| Project coordinator | Is the work tied to running the business, with discretion? | Logs, minutes and document control |
The executive test in Fact Sheet 17B asks about managing, directing “two or more other full-time employees or their equivalent,” and authority over hiring and firing. Whether directing a subcontractor’s crew counts toward that is a question to put to counsel, not to assume.
The administrative test in Fact Sheet 17C requires “discretion and independent judgment with respect to matters of significance,” which it describes as authority to make an independent choice “free from immediate direction or supervision.”
The professional test in Fact Sheet 17D lists engineering as a field of learning, and also says the exemption “does not apply to occupations in which most employees acquire their skill by experience.” A title containing the word engineer satisfies neither sentence.
One more provision matters on a jobsite. Section 541.3 states that non-management employees in construction occupations are not exempt “no matter how highly paid they might be.”
Why does the overtime exemption go wrong slowly?
Nobody decides to misclassify. A role is set up correctly, the duties shift a little with each project, and the classification is never reopened.
The usual path runs through growth. A firm hires its first project engineer as a true assistant project manager, with buyout scopes and judgment calls of their own. Five years on there are six of them and a procedure for everything. The title is unchanged. The job has become processing, fifty-five hours a week of it. A field engineer seat drifts the same way.
Titles do the rest. Contractors hand out titles in place of raises, and a seat that should be leveled by control ends up leveled by what sounded right in a retention conversation.
The reckoning arrives from the side: a departure on bad terms, a complaint, a buyer’s diligence team. The exposure is counted backward across pay periods already worked, and how far back is for counsel to say.
How does state law change the answer?
State law can add to the federal rules, and where the two differ an employee generally gets the more protective one. Some states publish their own exemption tests and salary minimums. A person properly exempt under federal rules may still be owed overtime where they work.
California’s labor commissioner describes its overtime exemptions in terms that include pay of “not less than two times the monthly State minimum wage for full time employment.” Washington’s Department of Labor and Industries opens its state overtime guidance with a correction: “Contrary to popular belief, some salaried employees are entitled to overtime.”
A contractor in the United States that works in one state can keep one file. An Atlanta general contractor that takes a project in California, or a Houston firm that opens an office in Seattle, may be taking on another state’s rules for the people working there. The Department of Labor keeps a directory of state labor offices.
Before the next offer letter goes out
Selah Talent Partners is a search firm and not a law firm, and nothing here is legal advice. What follows is housekeeping to bring to employment counsel:
- For each salaried role below project manager, write down one real week: tasks, hours, who reviewed the work.
- Set that week against the three federal tests, and any state test, with counsel.
- Reopen the classification when the duties change, whether or not the title does.
If a search turns up a seat whose title and duties have drifted apart, take the classification question to counsel first. Selah Talent Partners runs confidential executive search for mandates that cannot be publicly posted, and for employers an accurate description of the seat is where that work begins.
The rules read the week. The org chart should too.
Sources and further reading
- DOL overtime, overtime pay overview
- DOL thresholds, earnings thresholds
- Fact Sheet 17A, exemptions overview
- Fact Sheet 17B, executive exemption
- Fact Sheet 17C, administrative exemption
- Fact Sheet 17D, professional exemption
- Fact Sheet 17G, salary basis requirement
- 29 CFR 541, the exemption regulations
- Section 541.700, primary duty
- Section 541.3, scope of the exemptions
- California DIR, exemptions from the overtime laws
- Washington L&I, overtime and exemptions
- State offices, DOL directory of state labor offices