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Construction Companies: Hourly vs. Salaried Employee Payroll (2026)
Hourly versus salaried in a construction company is not a preference, it is the exemption test: a salary of at least $684 a week plus a duties test, and construction companies have industry-specific exemptions on top. Construction laborers at the national median earn $906 a week. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Who in a construction company can be salaried and exempt
Non-management construction workers such as carpenters, electricians, plumbers, iron workers, operating engineers and laborers are blue-collar employees who cannot be classified as exempt under the FLSA white-collar exemptions no matter how highly paid. Those exemptions require a duties test and a salary of at least $684 per week.
Workers under 18 may not perform most roofing work on or about a roof (HO 16), trenching or excavation work including working in a trench more than four feet deep (HO 17), or most wrecking and demolition work (HO 15). A limited exemption from HO 16 and HO 17 exists for apprentices and student-learners who are at least 16 and enrolled in approved programs.
The salary math for construction companies
The standard salary level is $684 a week, $35,568 a year. BLS puts the May 2025 national median for construction laborers at $47,120, which is $906 a week, above the floor, so for that role the duties test is the whole question. Paying a salary to a non-exempt employee is legal; it just does not remove overtime, which is then computed on the salary divided by hours actually worked each week.
What changes when a role moves between the two
Moving laborers and carpenters from hourly to salaried changes the pay code, the timekeeping rule and the overtime treatment at once. A salaried non-exempt employee still needs hours recorded every week, and a salaried exempt one needs the exemption documented against the rule above, because in an audit the burden of proving the exemption sits with the employer.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- Non-management construction workers such as carpenters, electricians, plumbers, iron workers, operating engineers and laborers are blue-collar employees who cannot be classified as exempt under the FLSA white-collar exemptions no matter how highly paid. Those exemptions require a duties test and a salary of at least $684 per week. [DOL Fact Sheet #17P]
- Workers under 18 may not perform most roofing work on or about a roof (HO 16), trenching or excavation work including working in a trench more than four feet deep (HO 17), or most wrecking and demolition work (HO 15). A limited exemption from HO 16 and HO 17 exists for apprentices and student-learners who are at least 16 and enrolled in approved programs. [DOL Fact Sheet #43]
Read the full guide to FLSA overtime rules for employers, and the rest of the construction company payroll library.
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Frequently Asked Questions
Can a construction company pay laborers a salary and skip overtime?
Only if the role meets an exemption: the $684 weekly salary floor plus the duties test, or an industry-specific exemption. Non-management construction workers such as carpenters, electricians, plumbers, iron workers, operating engineers and laborers are blue-collar employees who cannot be classified as exempt under the FLSA white-collar exemptions no matter how highly paid.
Does the $47,120 national median for construction laborers clear the salary test?
$906 a week is above the $684 floor, so salary is not the obstacle; the duties test is. BLS OEWS, May 2025.
What does managed payroll cost for a construction company?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Prevailing wage compliance, certified payroll and union vs non-union are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Construction Companies. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Overtime Pay Under the FLSA
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