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A sometimes-overlooked requirement for classifying an employee as exempt from overtime is that, with limited exceptions, the employee must be paid on a “salary basis.” [1] Indeed, when employers fail to pay their exempt employees on a salary basis, they may be subject to lawsuits alleging exempt misclassification. As such, properly paying employees on a salary basis is critical to classifying employees as exempt.
The General Rule
Among other requirements, in order for an employer to classify an employee as exempt from overtime, the employee generally must be paid on a “salary basis.”
Time Is Money: A Quick Wage-Hour Tip on … Complying With The Salary Basis Requirement For Exempt Employees Monday, February 22, 2021
A sometimes-overlooked requirement for classifying an employee as exempt from overtime is that, with limited exceptions, the employee must be paid on a “salary basis.” [1] Indeed, when employers fail to pay their exempt employees on a salary basis, they may be subject to lawsuits alleging exempt misclassification. As such, properly paying employees on a salary basis is critical to classifying employees as exempt.
The General Rule
Among other requirements, in order for an employer to classify an employee as exempt from overtime, the employee generally must be paid on a “salary basis.”