Does an employer that provides a nondiscretionary bonus to meet the salary level threshold for the Fair Labor Standards Act (FLSA) overtime exemptions have any obligations towards an employee who leaves in the middle of a quarter?

Author: Deborah J. Tibbetts, Esq.

Yes. If an employer uses a nondiscretionary bonus or incentive payment to meet up to 10 percent of the salary level threshold for an overtime exemption under the FLSA and an employee leaves in the middle of a quarter, the employer must go back and make sure the employee was paid at least the minimum for the exemption and make up any shortfall in the final paycheck.