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E-Commerce & DTC Brands: Hourly vs. Salaried Employee Payroll (2026)
Hourly versus salaried in an e-commerce company is not a preference, it is the exemption test: a salary of at least $684 a week plus a duties test, and e-commerce companies have industry-specific exemptions on top. Laborers and freight, stock, and material movers. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Who in an e-commerce company can be salaried and exempt
Non-exempt employees must receive overtime at not less than time and one-half the regular rate for hours worked over 40 in a workweek, and hours cannot be averaged across weeks. When an employee works at two or more different straight-time rates in one week, the regular rate is the weighted average of those rates.
The executive, administrative and professional exemptions do not apply to manual laborers or other blue collar workers who perform repetitive operations with their hands, physical skill and energy. Such workers are entitled to minimum wage and overtime no matter how highly they are paid.
The salary math for e-commerce companies
The standard salary level is $684 a week, $35,568 a year. BLS puts the May 2025 national median for laborers and freight, stock, and material movers, hand at $40,240, which is $774 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 warehouse staff and customer service reps 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-exempt employees must receive overtime at not less than time and one-half the regular rate for hours worked over 40 in a workweek, and hours cannot be averaged across weeks. When an employee works at two or more different straight-time rates in one week, the regular rate is the weighted average of those rates. [DOL Fact Sheet #23]
- The executive, administrative and professional exemptions do not apply to manual laborers or other blue collar workers who perform repetitive operations with their hands, physical skill and energy. Such workers are entitled to minimum wage and overtime no matter how highly they are paid. [29 CFR 541.3(a)]
Read the full guide to FLSA overtime rules for employers, and the rest of the e-commerce company payroll library.
Managed Payroll, Handled.
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Frequently Asked Questions
Can an e-commerce company pay warehouse staff 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-exempt employees must receive overtime at not less than time and one-half the regular rate for hours worked over 40 in a workweek, and hours cannot be averaged across weeks.
Does the $40,240 national median for laborers and freight, stock, and material movers, hand clear the salary test?
$774 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 an e-commerce company?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Seasonal workforce spikes, multi-state nexus payroll tax and contractor vs W-2 for fulfillment 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 E-Commerce & DTC Brands. 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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