Most salaried employees are referred to as "exempt" due to their exemption from minimum wage and overtime protection laws. Furthermore, the U.S. Department of Labor (DOL) has established strict requirements for salaried workers that employers must follow. These criteria allow salaried employees certain rights.
A salaried employee is one who is paid a predetermined amount weekly or on a less regular basis, such as biweekly, semimonthly or monthly. According to the DOL, this predetermined amount must make up all or part of the employee's pay.
The salaried worker is entitled to his entire pay, regardless of variations in the amount or standard of work performed. Unlike the hourly worker who is paid based on hours worked during the pay period, the salaried worker must receive his entire pay, regardless of the number of hours or days worked. Furthermore, the employer cannot dock his salary because of changes in the business's operation requirements. If the employee is available and willing to work, the employer must pay him his full salary, even if no work is available.
The salaried worker's pay can, however, be docked for weeks in which she performs no work. Specifically, if she does no work in the workweek, the employer does not have to compensate her for that week. But, the employer cannot dock her pay in half-day increments, if she takes time off from work to handle personal matters besides sickness and disability. It must make the deduction in full-day increments. Consequently, if she's absent for 2 1/2 days for such reasons, the employer can only dock her pay for two days.
The DOL notes that federal law does not require employers to give employees their final paycheck immediately upon termination. But, state law may differ with this rule. Consequently, the salaried worker is entitled to his final paycheck immediately if state law requires it. The employer may prorate the salaried worker's pay in new-hire and termination situations; it may pay him only for the days worked during these pay periods. The employer must deduct or prorate the salaried workers' pay based on his daily rate or hourly rate. In the latter case, the deduction/prorated amount is based on a standard 8-hour workday.
Severance pay is a matter between the employer and the employee. Still, many employers choose to give salaried workers severance pay, basing the amount on length of service. If the employment contract includes severance pay, the employer must honor it. Employees who do not receive severance pay as per their employment contracts can contact the DOL's Employee Benefits Security Administration (EBSA). Furthermore, a salaried employee can file a complaint with the state labor board if the employer violates salary employment laws.