Exempt status under the FLSA often requires payment of a fixed salary on the salary basis discussed in the DOL regulations. 29 C.F.R. § 541.602. An employee classified as exempt sometimes asserts that receipt of supplemental compensation beyond the fixed salary renders him a non-exempt employee. Courts, however, have rejected this argument, requiring only payment of the fixed
supplemental compensation
Circuit Court Confirms That Bonus Structure Based On Hours Worked Did Not Negate Employer’s Compliance With Salary Basis Test
By Noel P. Tripp on
Posted in Bonuses, Exemptions
The “salary basis” test is by far the most straightforward component of the white collar overtime exemptions, requiring only a fixed salary of $455/week (subject to state law) paid in compliance with the requirements of 29 CFR § 541.602. However, an employer’s use of an unusual compensation or bonus structure can still result in allegations that…