Payment on a “Salary Basis” Under the FLSA

Certain exemptions under the Fair Labor Standards Act (FLSA) and Minnesota state law require that an employee must be paid on a “salary basis.”  An employee is considered to be paid on a “salary basis” when 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.”  See 29 C.F.R. § 541.602(a).

Minnesota law defines “salary” in a similar way.  Minnesota law specifies that “[a] salary is not an hourly rate,” and further provides that “[a]n employee is paid a salary if the employee, through agreement with an employer, is guaranteed a predetermined wage for each workweek.”  See Minn. R. § 5200.0211.

About Michael Miller

Michael is a Chambers-rated attorney in Briggs and Morgan's Employment, Benefits, and Labor group and is head of the firm’s Employment Law Counseling and Compliance practice group. He has 25 years experience counseling employers to prevent unwanted litigation and advises companies of ongoing changes in federal, state and local employment law. Michael advises employers in all areas of employment law including discipline and discharge, leaves of absence, wage and hour compliance, non-compete and confidentiality agreements, affirmative action plans, background checking, and drug/alcohol testing. For Michael's full bio, click here.

Posted on October 24, 2011, in Wage and Hour and tagged . Bookmark the permalink. Leave a comment.

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