Salary Basis Test - Checklist

Authors: Michael Cardman, XpertHR Legal Editor, and Allen S. Kinzer, Vorys, Sater, Seymour and Pease LLP

This checklist can help employers be sure that an employee is paid on a salary basis, which is a requirement for many of the exemptions from the overtime pay requirements of the Fair Labor Standards Act. Note that there are exceptions to the salary basis requirement for teachers, lawyers, doctors and other employees. Those exceptions are not addressed in this checklist.

Salary Basis Test Checklist

The Employee's Salary Level Is Adequate (Check One)

  • The employee is paid a salary of at least:
    • $455.00 weekly;
    • $910.00 biweekly;
    • $985.83 semimonthly; or
    • $1,971.66 monthly; or
  • The employee is employed in American Samoa by an employer other than the federal government and paid a salary of at least:
    • $380.00 weekly;
    • $760.00 biweekly;
    • $823.33 semimonthly; or
    • $1,646.67 monthly; or
  • The employee is an academic administrative employee and paid a salary at least equal to the entrance salary for teachers in the educational establishment by which the employee is employed; or
  • The employee is a computer employee and paid at least $27.63 an hour.

The Employee Is Paid in Cash

  • The employer does not claim credit for non-cash items of value such as board, lodging or other facilities that it may provide to the employee.

No Deductions Are Made from the Employee's Salary for the Quantity or Quality of the Work the Employee Performs

The employee's salary is not subject to reduction because of variations in the quality or quantity of the work. For example, the employee receives his or her full salary regardless of whether he or she:

  • Fails to meet productivity targets;
  • Turns in substandard work;
  • Arrives late or leaves early;
  • Violates minor, unwritten workplace rules.

Any Deductions Made From the Employee's Salary Are Permissible

The employee's salary is deducted only:

  • For absences of one or more full days for personal reasons other than sickness or disability;
  • For absences of one or more full days due to sickness or disability if made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness;
  • To offset amounts employees receive as jury or witness fees or military pay;
  • For penalties imposed in good faith for violations of safety rules of major significance;
  • For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule violation; or
  • During the employee's first and last weeks or employment, or during weeks in which the employee takes unpaid leave under the Family and Medical Leave Act (FMLA).