Paying an employee a salary does not render him or her exempt from overtime pay, the U.S. Department of Labor (DOL) recently reminded employers.

In announcing an almost $2 million settlement with a Citigroup subsidiary, the administrator of DOL’s Wage and Hour Division (WHD), made clear that many Fair Labor Standards (FLSA) requirements apply, even if an employee is paid on a salary basis. “Employers must understand that simply paying an employee a salary does not necessarily mean the employee is not eligible for overtime,” David Weil said.

After a DOL investigation revealed that Citigroup Technology Inc. had misclassified 882 employees, the company agreed to resolve the findings for $1,870,009 in back wages and $97,680 in a civil penalty.

The employer improperly classified a group of analysts as exempt from the FLSA’s minimum wage and overtime provisions, DOL alleged after determining that the analysts did not meet the requirements for the law’s administrative exemption.

Because CTI had classified them as exempt, it paid them a fixed salary, regardless of the number of hours they worked. It also failed to properly track their hours, in violation of the FLSA.

DOL’s warning has implications for employers prepping for new overtime regulations. Beginning December 1, all employees who are paid less than $913 per week must be paid overtime when they work more than 40 hours in a workweek. Employers also must maintain records of those employees’ hours—and not just when they work overtime.

At least one expert has predicted that DOL will be ready to enforce the new overtime rules on the day they take effect. Weil has offered similar warnings: “The Wage and Hour division will continue its vigorous enforcement of the law, including the overtime regulations, to ensure that workers take home every penny they have rightfully earned,” he said in a statement.