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Comply With the Salary Basis Test Checklist

Authors: XpertHR Editorial Team and Allen S. Kinzer, Vorys, Sater, Seymour and Pease LLP

When to Use

Use this checklist to 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 the exceptions to the salary basis requirement for teachers, lawyers, doctors and other employees are not addressed in this checklist.

NOTE: The US Department of Labor (DOL) has proposed regulations that would, if finalized, increase the minimum salary from $455 per week to $679 per week (or from $23,660 per year to $35,308 per year). The proposed regulations also would allow employers to count nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the standard salary level test, as long as they are paid annually or more frequently. The DOL projects the regulations will take effect January 2020.

Employers do not have to complete the following steps in sequential order to properly complete the checklist.

Customizable Checklist