Page 7 - White Paper- Wage and Hour Laws

“Salary Basis:” It matters less what you call it than what it is- if the

employee’s pay is constant from week to week even though hours worked varies,

that employee is probably paid on a “salary basis.” If, however, pay is regularly

docked for hours missed, it is most likely not “salary” even if it is called that in the

payroll records.

Assuming the employee makes the minimum earnings and is paid a

consistent amount no matter what the actual hours worked are, they are still only

“exempt” from overtime if what they actually do all day is considered an “exempt”

duty under the law.

This is where an employer can really start tearing their hair out. The

exemptions are broadly stated in the federal overtime laws as “bona fide

administrative, professional, or executive” duties. In addition to the piles and piles

of court decisions interpreting what those words mean, the Department of Labor

has a long list of specific duties that it considers “exempt” under this language. If

you are fortunate enough to find the category that fits you in the statute or

Department of Labor regulations (for example, there are specific rules for outside

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