Compliance Watch:

What are my rights as a salaried employee in Kentucky?

A salaried employee in Kentucky is any employee who receives a fixed predetermined compensation at the end of every pay period. According to Kentucky labor laws, salaried employees should be paid at least twice a month within less than 18 days of the period in which the salary was earned. Further, an employee who does not receive their salary on the regular payday should be paid within 6 days of demanding payment. 

In Kentucky, salaried employment falls under two categories as per the Fair Labor Standards Act (FLSA). The first category comprises exempt employees who are not subject to state or federal overtime and minimum wage laws and are not eligible for overtime. Salaried non-exempt employees fall under the second category of employees who are bound by Kentucky’s minimum wage and overtime laws.

Please note that this table presents a general comparison between the entitlements of salaried and hourly employees in Kentucky. The specifics can vary based on individual employment contracts, company policies, and other state-specific regulations. You can learn more about the rights of non-salaried employees in the state from our comprehensive guide on your rights as an hourly employee in Kentucky.

Kentucky’s labor laws provide the following basic rights and protections to salaried employees in the state.

• Minimum Wage: Non-exempt salaried employees in Kentucky are entitled to a minimum hourly compensation of $7.25 per hour. It is important to note that some cities in the state have passed legislation raising the minimum wage above the state’s minimum wage. However, the Kentucky State Supreme Court ruled that the cities did not have the authority to set a separate minimum wage. Therefore, the state has a blanket minimum wage rate of $7.25 per hour. 
• Overtime Pay: Eligible salaried employees are entitled to overtime pay at a rate of 1.5 times their regular wage for all time worked over 40 hours in a workweek. Further, non-exempt salaried employees who work 7 days in a workweek should receive 1.5 times their regular pay for all time worked on the seventh day. 
• Equal Pay: Salaried employees who perform comparable work or hold positions with comparable requirements relating to skill, effort, and responsibility have the right to receive equal pay. Employers in the state can only base pay differentials on seniority or merit. 
• Anti-Discrimination: Kentucky laws protect employees from discrimination based on all protected characteristics as per the Civil Rights Act, which include race, color, religion, sex, national origin, sexual orientation and identity, disability, genetic information, or citizenship status. The state designates age, HIV status, being a smoker, and using tobacco products outside the workplace as additional protected characteristics. 
• Family and Medical Leave: Exempt employees can take unpaid leave of up to 12 weeks for certain family or medical reasons under the federal Family and Medical Leave Act (FMLA).
• Pregnancy Accommodation: Kentucky has a Pregnant Workers Act that requires employers to provide reasonable accommodations for pregnant workers to ensure they can perform their job duties safely and effectively.

Please note that employment laws can change over time. Additionally, some industries and professions may have specific regulations and rights that apply to them. Therefore, it’s important to consult an employment attorney or contact the Kentucky Education and Labor Cabinet for the most current information on employee rights.

Yes. While exempt salaried employees are not eligible for overtime pay or compensatory time, overtime pay applies to non-exempt salaried employees. Eligible employees earn overtime pay for all time worked beyond forty hours in a workweek. Similarly, eligible employees who work for all seven days in a workweek earn overtime pay for all hours worked on the 7th consecutive day of work in a workweek. State employees can opt for compensatory time instead of receiving overtime pay. 

Kentucky state laws exempt the following groups of employees from receiving overtime pay for exceeding 40 hours in a workweek:

• Bona fide executive, administrative, professional, and outside sales employees.
• Outside collectors as defined by the administrative regulations of the Commissioner.
• Certain domestic employees.
• Employees of retail stores, service industries, hotels, motels, and restaurants whose annual gross volume of sales for the previous five years are ninety-five thousand dollars or less.
• Workers who are employed in family businesses.
• Newspaper delivery employees.
• Babysitters or people employed by elderly people or convalescing people as companions.

Kentucky state laws limit wage deductions to voluntary deductions, deductions required by law, and deductions that are required by collective bargaining agreements. Accordingly, employers in the state are allowed to make the following deductions from their employees’ wages:

• Deductions that are Authorized by Law: These include court-ordered wage garnishments for spousal support, child support, or debt repayment, and federal, state, and local taxes.
• Voluntary Deductions: Employees in Kentucky can authorize deductions for insurance premiums and medical bills. However, employers cannot make these deductions without the employees’ written and explicit authorization.
• Deductions Required by Collective Bargaining Agreements: Deductions that are outlined as part of collective bargaining agreements that bind employees and employers are allowed as long as they are not rebates of past wage payments.
• Union Dues: Kentucky is a right-to-work state. Therefore, employers can deduct union dues from wages as per collective bargaining agreements. However, such deductions should be voluntary. 

In addition to outlining these permissible deductions, Kentucky state laws prohibit the following deductions explicitly:

• Fines.
• Cash shortages from tills that are operated by more than one employee.
• Deductions to recover the cost of broken property.
• Losses due to dishonored checks accepted by employees as payment for sold goods.
• Losses due to defective products or faulty workmanship.

According to Kentucky labor laws, salaried employees in the state are entitled to 10-minute paid breaks for every four hours of work. Additionally, workers in the state are entitled to reasonable meal breaks. The law does not define the term “reasonable” but most employers interpret it to mean 30-minute periods of uninterrupted breaks. For non-exempt employees, these breaks are unpaid. 

In addition to paid short breaks and longer meal breaks, eligible salaried employees in Kentucky are entitled to unpaid family and sick leave as per the FMLA. However, Kentucky leave laws do not require employers to provide any other type of sick leave, holiday leave, or vacation leave.

The FLSA does not address flexible work arrangements but defines flexible working schedules as any arrangements that deviate from the standard 9-5, 40-hour workweek. Similarly, Kentucky’s labor laws do not limit employers to specific alternatives to the standard 40-hour week. Therefore, employees and employers in the state can enter agreements establishing flexible work arrangements. Common alternative schedules in the state include compressed workweeks and occasional flextime that allows employees to vary their workdays regularly.

In Kentucky, exempt status refers to exclusion from the state’s minimum wage and overtime laws. Therefore, exempt employees are not entitled to overtime pay regardless of the number of hours worked in a week. Additionally, they are not entitled to the state’s minimum wage of $7.25 per hour. They are bound by a separate set of laws as outlined by the FLSA.

Exempt status has the following implications for employees in Kentucky:

• Nature of Compensation: Exempt employees are compensated on a salary basis and receive a fixed and consistent salary at least twice a month regardless of the number of hours worked or the quality of their work. 
• Overtime Eligibility: Exempt employees are not bound by overtime laws and are ineligible for overtime pay for exceeding 40 hours in a workweek. Consequently, they do not receive additional compensation for working extra hours.
• Job Duties: Exempt status is typically reserved for employees in managerial, administrative, professional, and select sales roles. To qualify for exemption, these employees are required to have decision-making authority and autonomy to exercise independent judgment. 

Exempt status has the following implications for employers in Kentucky:

• Cost Savings: Since exempt employees are not entitled to overtime pay, employers are not required to pay additional wages when employees exceed 40 hours in a workweek.
• Flexibility: Exempt status allows employers to have more flexibility in scheduling exempt employees’ work hours by eliminating the constraints of adhering to overtime regulations. 
• Compliance with Employee Classification Regulations: Employers must ensure that employees are classified appropriately by using the FLSA’s exemption criteria. Misclassifying employees can cause legal issues and penalties.
• Recruitment and Employee Retention: Exempt status in Kentucky typically attracts a higher minimum salary threshold compared to the state’s minimum wage. Therefore, offering exempt status to employees can be an incentive for employee recruitment and retention. 

It’s important to note that exempt status is primarily governed by the Fair Labor Standards Act (FLSA). However, employers in Kentucky must comply with both state and federal regulations when classifying employees as exempt or non-exempt and determining their compensation and duties.

In Kentucky, employee exempt status typically excludes employees from certain labor laws and regulations, such as minimum wage and overtime requirements. To determine whether an employee qualifies for exempt status in the state, consider the following tests: 

1. Salary Basis Test: All exempt employees are paid on a salary basis. To qualify for exempt status in Kentucky, an employee should be paid at least two times every month within 18 days of the first day of each pay period. 
2. Salary Level Test: To qualify for exempt status in Kentucky, a salaried employee should earn a minimum of $684 per week. 
3. Duties Test: As per the FLSA, exempt employees perform specific job duties. Duties that meet the criteria for exempt status fall under the following exemption categories:
   • Executive Exemption: To qualify for the executive exemption, an employee’s primary duties should include managing an enterprise or one of its recognized departments, regularly directing the work of two or more employees, and making significant employment decisions.
   • Administrative Exemption: A salaried employee qualifies for the executive exemption if they exercise independent judgment, their primary duties involve office or non-manual work, and their work is directly related to customer management or general business operations.
   • Professional Exemption: Professionals such as lawyers and teachers qualify for the professional exemption if their primary duties require advanced knowledge that is customarily acquired through prolonged specialized education.
   • Computer Employee Exemption: Computer systems analysis, programming, and software engineering professionals are considered exempt if they are paid on a salary basis and their pay falls on or above the federal minimum salary threshold.

Non-exempt salaried employees in Kentucky are entitled to a minimum hourly wage of $7.25. Exempt salaried employees, who are not subject to the state’s minimum wage and overtime laws, are subject to the federal minimum salary threshold of $648 per week or $35,578 annually.

Eligible salaried employees earn overtime pay at a rate of 1.5 times their regular rate as per the Kentucky overtime laws. Similarly, eligible employees who work for seven days in a week without rest days are entitled to overtime pay for all hours on the seventh day of work. State employees can request compensatory time in lieu of overtime pay. Comp time is compensated at a rate of 1.5 hours of time off for every hour of overtime.

Kentucky state laws allow wage deductions under special circumstances. These include: 

• Deductions that are Authorized by Law: Legally-required deductions include court-ordered wage garnishments for spousal support, child support, or debt repayment, and federal, state, and local taxes.
• Voluntary Deductions: Employees in Kentucky can authorize deductions for insurance premiums and medical bills. However, employers cannot make these deductions without the employees’ explicit authorization.
• Deductions Required by Collective Bargaining Agreements: Deductions that are outlined as part of collective bargaining agreements that bind employees and employers are permissible as long as they are not rebates of past wage payments.
• Union Dues: Kentucky is a right-to-work state. Therefore, employers can deduct union dues from wages as per collective bargaining agreements. However, such deductions should be voluntary. 

Your employer is explicitly prohibited from making deductions for fines, cash shortages, property damage, and monetary loss due to defective products.

Common benefits and protections available to employees in Kentucky include:

• Minimum Wage: Kentucky upholds the federal minimum wage of $7.25 per hour. Additionally, Kentucky upholds the FLSA’s minimum salary threshold for exempt employees.
• Overtime Pay: Eligible employees in Kentucky are entitled to overtime pay at a rate of 1.5 times their regular rate for time worked above 40 hours in a workweek.
• Workers’ Compensation: Kentucky provides medical and disability benefits to employees who suffer work-related injuries or illnesses. 
• Protection from Discrimination: Kentucky enacts anti-discrimination laws that prohibit workplace discrimination on the basis of protected characteristics as per the Civil Rights Act and state-specific protected characteristics such as age, HIV status, being a smoker, and using tobacco products outside the workplace.
• Wage Deductions: Kentucky state laws limit permissible wage deductions to legally mandated deductions and voluntary deductions.

Labor violations in Kentucky can take various forms, including minimum wage violations, withheld or delayed payment of earned wages, failure of employers to provide mandatory rest and meal breaks, misclassification, discrimination, harassment, and retaliation for reporting violations and participating in labor violation investigations.

Employees who believe they have experienced wage-related violations are encouraged to report them to the Kentucky Education and Labor Cabinet by filling out the employment complaint form. Discrimination claims can be filed with the Kentucky Commission on Human Rights (KCHR) or the Equal Employment Opportunity Commission (EEOC).