Archive for October, 2015

The Salary Basis Test.

Last time we talked about the amount of salary to qualify for the White Collar exemptions, this time we are going to talk about the “salary basis test.” What you ask is the salary basis test. Great question. I’m going to answer it. Well, I’m going to let the regulations answer it:

An employee will be considered to be paid on a “salary basis” within the meaning of these regulations if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed. Subject to the exceptions provided in paragraph (b) of this section, an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked. Exempt employees need not be paid for any workweek in which they perform no work. An employee is not paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. If the employee is ready, willing and able to work, deductions may not be made for time when work is not available.

29 CFR §541.602(a).

So that is the general rule. Any week in which an exempt employee does any work, the exempt employee has to receive all of their salary (which has to be at least $455 for the week at least for now, but see my last post for the increase that will happen when the new regulations are finalized.   You can see is here) and it CAN’T be “subject to reduction because of variations in the quality or quantity of the work performed. . . . , an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked.” Id.

But that is just the general rule and there are exceptions. And we will talk about those next time.