Overview: The most frequently applied employee classification exemptions from the overtime requirements of the Fair Labor Standards Act (FLSA) all have a single requirement in common: to qualify, employees must be paid on a salary basis. This prerequisite is often referred to as the salary basis test.
An employee generally will satisfy the salary basis test if:
The second requirement trips up some employers, who mistakenly assume that they can dock an exempt employee's salary for infractions such as reporting to work late or failing to meet production quotas.
As with most things involving the FLSA, there are many exceptions and variations to the basic rule.
Trends: The U.S. Department of Labor is expected to raise the minimum salary level when it overhauls the FLSA regulations.
Author: Michael Cardman, Legal Editor
An employer may use this checklist to ensure sure that an employee is paid on a "salary basis," which is required by many of the exemptions from the overtime pay requirements of the Fair Labor Standards Act (FLSA).
An employer may use this policy to ensure they will meet the requirements of the "safe harbor" provision of the Fair Labor Standards Act (FLSA). Under the "safe harbor" provision, employers that inadvertently make improper deductions from the pay of exempt employees can shield themselves from overtime liability if they adopt a salary basis policy and take other steps.
XpertHR has updated its content to reflect new regulations proposed by the US Department of Labor (DOL) that would raise the minimum salary for an employee exempt from the overtime requirements of the Fair Labor Standards Act (FLSA) from $455 per week to an estimated $970 per week.
Under new Fair Labor Standards Act regulations proposed by the US Department of Labor, an estimated 4.6 million workers who are currently overtime-exempt would become eligible for overtime.
Use this workflow to determine if an employee is exempt or nonexempt from the minimum wage or overtime requirements of the Fair Labor Standards Act (FLSA).
According to the New York Times, President Obama will ask the US Department of Labor (DOL) to issue new regulations that would require employees to be paid a higher salary and spend a certain percentage of their time performing exempt work to qualify for an exemption from the overtime requirements of the Fair Labor Standards Act (FLSA).
The Minimum Wage and Employee Classification sections of the Employment Law Manual now include information about upcoming changes to the minimum salary requirements for executive and administrative employees, to the minimum wage credit for tipped employees and to the allowances for meals, lodging and uniforms.
Our new infographic dramatically shows the disconcerting enforcement trends facing employers throughout the US.
An employer may prorate the base pay of a salaried employee without forfeiting the employee's exemption from the overtime requirements of the Fair Labor Standards Act (FLSA), as long as it covers the shortfall with additional premium compensation, the 3rd Circuit Court of Appeals held in Sander v. Light Action.
HR guidance on complying with the salary basis test of the Fair Labor Standards Act.