Wage & Hour Compliance · South Carolina

South Carolina has no overtime statute, so the federal Fair Labor Standards Act (FLSA) governs: covered, non-exempt employees must be paid at least one and one-half times their regular rate for hours over 40 in a workweek. A white-collar exemption generally requires a duties test and a salary of at least $684 a week. The South Carolina employment lawyers at Bettis Law Group advise employers on both.

By Bettis Law Group, LLP · Columbia, South Carolina

The fast version for employers:

  • The FLSA sets overtime, one workweek at a time, at least one and one-half times the regular rate, which includes nondiscretionary bonuses.
  • The white-collar salary level is $684 a week ($35,568 a year); the highly compensated employee level is $107,432 a year.
  • Defense costs follow visible drivers: who is investigating, headcount, records, liquidated damages and collective actions.

South Carolina Has No Overtime Law, So the FLSA Governs

South Carolina has no overtime statute (a House bill that would add daily overtime, H.4751, remains in committee and is not law). The FLSA covers an enterprise with at least $500,000 in annual gross sales or business done whose employees are engaged in commerce or handle goods that moved in commerce, and certain hospitals, residential care institutions, schools and public agencies regardless of volume (29 U.S.C. § 203(s)(1)). Employees individually engaged in commerce or in producing goods for commerce are also covered (§ 207(a)(1)).

The South Carolina Payment of Wages Act (S.C. Code §§ 41-10-10 to -110) governs payment, not overtime. Section 41-10-30 requires written notice at hiring of the normal hours and wages agreed upon, the time and place of payment and deductions, seven calendar days’ written notice of changes other than raises, wage records and pay statements, except for employers with fewer than five employees at all times during the preceding twelve months and employers of domestic labor in private homes (§ 41-10-20). Final wages are due within 48 hours of separation or by the next regular payday, which may not exceed 30 days (§ 41-10-50); see our guide to final paychecks in South Carolina.

Who Is Exempt: Three Tests, Not One

The executive, administrative and professional exemptions (29 U.S.C. § 213(a)(1)) generally require a minimum salary level, payment on a salary basis and qualifying duties (29 C.F.R. Part 541). A job title alone does not establish exempt status (§ 541.2). The employer must prove the exemption by a preponderance of the evidence (E.M.D. Sales, Inc. v. Carrera, U.S. Supreme Court, 2025), not the stricter clear-and-convincing standard the Fourth Circuit, which covers South Carolina, had required.

The Salary Level: $684 a Week

The Department of Labor states the standard salary level as $684 per week ($35,568 a year) and the highly compensated employee (HCE) level as $107,432 a year, including at least $684 a week paid on a salary or fee basis (29 C.F.R. §§ 541.600, 541.601). A federal court in Texas vacated the 2024 rule, which would have raised the level to $844 and then $1,128 a week, on November 15, 2024, and a second court did the same that December. The Fifth Circuit dismissed both appeals in May 2026, and a technical amendment published May 15, 2026 restored the 2019 text to the Code of Federal Regulations; the DOL says future rulemaking is not foreclosed.

The Salary Basis: A Fixed Amount, Not Docked

Salary basis means a predetermined amount each pay period, not reduced for variations in the quality or quantity of the work and paid in full for any week in which the employee performs any work, subject to listed exceptions (§ 541.602). An actual practice of improper deductions can cost the exemption, for the period of the deductions, for employees in the same job classification working for the managers responsible (§ 541.603(b)). A clearly communicated policy prohibiting improper deductions, with a complaint mechanism, plus reimbursement and a good-faith commitment to comply, preserves it unless improper deductions willfully continue after complaints (§ 541.603(d)). High pay is no substitute: in Helix Energy Solutions Group, Inc. v. Hewitt (2023), a supervisor paid only a daily rate who earned over $200,000 a year was not paid on a salary basis and was owed overtime.

The Duties Tests

  • Executive: a primary duty of managing the enterprise or a customarily recognized department or subdivision; customarily and regularly directing the work of two or more other employees; and authority to hire or fire, or hiring and firing recommendations given particular weight (§ 541.100).
  • Administrative: a primary duty of office or non-manual work directly related to management or general business operations, including discretion and independent judgment on matters of significance (§ 541.200).
  • Professional: a primary duty requiring advanced knowledge in a field of science or learning customarily acquired by prolonged specialized intellectual instruction, or invention, imagination, originality or talent in a recognized artistic or creative field (§ 541.300).
  • HCE: at the $107,432 level, an office or non-manual employee who customarily and regularly performs at least one exempt duty (§ 541.601).

The Regular Rate: What Goes In and What Stays Out

Overtime is paid on the regular rate: total remuneration for employment in the workweek, minus the statutory exclusions, divided by the total hours actually worked that week (29 C.F.R. § 778.109).

  • In: nondiscretionary bonuses, including most attendance, production and retention bonuses (§ 778.211(c)); commissions (§ 778.117); and shift differentials and hazard premiums (§ 778.207(b)).
  • Out, among other statutory exclusions (29 U.S.C. § 207(e)): gifts not measured by hours, production or efficiency; pay for occasional periods when no work is performed, such as vacation, holidays and illness; reimbursed expenses; truly discretionary bonuses, where the employer decides both whether to pay and how much at or near the end of the period with no prior promise; contributions to bona fide retirement and insurance plans; and true overtime premiums.

In the regulation’s example, a $12-an-hour employee who works 46 hours and earns a $46 production bonus has a $13 regular rate and is owed $637 for the week; figuring overtime on $12 and adding the bonus on top pays $634 (§ 778.110). See our article on bonus payments.

Common Overtime Mistakes South Carolina Employers Make

  • Treating “salaried” as “exempt.” A non-exempt salaried employee is owed time and a half for hours over 40, at a regular rate equal to the salary divided by the hours it is meant to cover (29 C.F.R. § 778.113(a)).
  • Allowing off-the-clock work. Work the employer suffers or permits is work time, at the workplace or at home, if the employer knows or has reason to believe it is being done (§§ 785.11, 785.12). “The mere promulgation of a rule against such work is not enough” (§ 785.13). Watch pre-shift tasks, after-hours email and working meals (§ 785.19(a)); see our article on compensable time.
  • Averaging across a pay period. Each workweek stands alone: 30 hours one week and 50 the next means 10 overtime hours in the second week, however often you pay (§ 778.104).
  • Using comp time in a private business. The FLSA allows comp time in lieu of overtime pay only for public agencies (29 U.S.C. § 207(o)). A private employer generally pays overtime earned in a workweek on the regular payday for the period in which that workweek ends (29 C.F.R. § 778.106).

What Drives the Cost of Defending a Wage-and-Hour Audit or Claim

  • Who is asking. The U.S. Department of Labor’s Wage and Hour Division (WHD), South Carolina’s Department of Labor, Licensing and Regulation on Payment of Wages Act complaints (S.C. Code §§ 41-10-70, -110) or employees in court. Since June 27, 2025, WHD may not request liquidated damages in any pre-litigation investigation or resolution (Field Assistance Bulletin No. 2025-3).
  • Liquidated damages. In a lawsuit, unpaid overtime comes with “an additional equal amount as liquidated damages” (29 U.S.C. § 216(b)), which the court may reduce or deny if the employer shows good faith and reasonable grounds for believing it complied (§ 260).
  • The look-back and headcount. Two years, or three for a willful violation (§ 255(a)), across every affected employee and pay period.
  • Records. For non-exempt employees, the FLSA requires records of hours worked each workday and workweek, the regular rate and wages paid (§ 211(c); 29 C.F.R. § 516.2). Where records are inadequate, employees may prove hours “as a matter of just and reasonable inference” (Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946)).
  • Collective actions and fees. Similarly situated employees may join by written consent filed in court, and a judgment for employees carries “a reasonable attorney’s fee to be paid by the defendant, and costs of the action” (§ 216(b)).
  • How back wages are paid. Employees who accept back wages paid in full under WHD supervision waive their right to sue for those wages and liquidated damages (§ 216(c)); payments an employer makes on its own do not. WHD’s PAID program lets an eligible employer self-audit the last two years and pay back wages under WHD supervision for a release limited to those violations; an employer already under investigation or in litigation over the same practices is not eligible.

Frequently Asked Questions

Does South Carolina have its own overtime law? No. The federal FLSA governs: covered, non-exempt employees receive at least one and one-half times their regular rate for hours over 40 in a workweek.

What is the salary threshold for exempt employees in 2026? $684 per week ($35,568 a year) for the executive, administrative and professional exemptions, and $107,432 a year for the highly compensated employee test. Outside sales employees, teachers and practicing licensed doctors and lawyers have no salary requirement, and computer employees may instead be paid at least $27.63 an hour. The 2024 rule that would have raised the levels was vacated.

Can a private business give comp time instead of overtime pay? No. The FLSA allows compensatory time off in lieu of overtime pay only for public agencies (29 U.S.C. § 207(o)).

Do bonuses count toward overtime pay? Nondiscretionary bonuses do. Truly discretionary bonuses, with no prior promise, and gifts not tied to hours, production or efficiency stay out of the regular rate.

How much does it cost to defend a wage and hour audit? It depends on the facts: who is investigating, how many employees and pay periods fall within the two-year look-back (three years if willful), your records, liquidated damages and whether a collective action is filed.

Request an Appointment with a South Carolina Employment Lawyer at Bettis Law Group

If your business wants its overtime practices reviewed, or has a Department of Labor inquiry or wage claim, the South Carolina employment lawyers at Bettis Law Group can help. To speak with a South Carolina employment lawyer in confidence, call (803) 799-9311 or request an appointment online. You can also learn more about our wage and hour practice.

This article is general legal information, not legal advice, and does not create an attorney-client relationship. Federal and South Carolina employment laws change, agencies update their rules, and every situation turns on its specific facts. Consult a licensed South Carolina employment attorney about your business’s situation.