Overview: The most frequently applied 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 US Department of Labor (DOL) is expected to issue new FLSA regulations that will raise the minimum salary for overtime-exempt employees.
Author: Michael Cardman, Legal Editor
Updated to reflect adjustments to the minimum salaries for executive employees, administrative employees and professional employees, and to the minimum pay for computer professionals and physicians and surgeons paid an hourly rate, effective January 1, 2019.
An independent commission has raised a number of concerns that the Pennsylvania labor department must address before raising the minimum salary for most overtime-exempt employees to nearly $48,000.
It is not clear what information the DOL hopes to learn from the listening sessions beyond what it collected from the 214,000-plus public comments it received last year.
The Washington State Department of Labor & Industries is looking at several options for increasing the minimum salary for overtime-exempt employees, ranging from $455 per week to $1,440 per week.
Updated to reflect a Supreme Court ruling concerning an overtime exemption for auto dealership service advisors.
Updated to reflect the overtime and recordkeeping exemption for employees of seasonal amusement and recreational establishments, effective January 1, 2018.
The US Department of Labor is appealing the permanent injunction blocking the Obama administration's 2016 overtime rule not to uphold the $47,476 salary threshold but rather to preserve its authority to set a lower salary threshold.
The US District Court for the Eastern District of Texas ruled that the US Department of Labor (DOL) exceeded its authority when it raised the minimum salary for most overtime-exempt employees to $47,476 last year.
The US Department of Labor (DOL) is asking employers to offer their feedback on a variety of questions relating to its plans to update the Fair Labor Standards Act (FLSA) overtime rules.
The Trump administration defended its right to establish a minimum salary level for overtime-exempt employees in a legal brief filed June 30.
HR guidance on complying with the salary basis test of the Fair Labor Standards Act (FLSA).