What Are Labor Laws Regarding Salaried Employees?

By Grace Ferguson
The appropriate labor laws must be applied when paying salaried employees.

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The labor laws for salaried employee are different from those for hourly employees. The latter gets paid according to the number of hours worked during the pay cycle. But salaried employees receive a predetermine amount of pay weekly or on a more infrequent basis, according to the United States Department of Labor (DOL).

Labor

The salaried employee should receive his entire pay regardless of the number of hours or days he works, except when permissible deductions apply. As long as the salaried worker is able, available and willing to work, the employer must pay him his full salary, even if work is unavailable. The employer cannot reduce his pay because of the quality or amount of work he does. The salary can constitute part or all of the employee's pay. The salary should be a definite and guaranteed amount that the employee can count on. If the employee does not work at all during the workweek, the employer does not have to pay him for that week.

Deductions

Permissible deductions include disciplinary suspension, unpaid leave and overusing benefit days, such as vacation, personal time and sick time. The employer cannot deduct the salaried worker's pay for partial days taken; the deduction must be made on a full-day basis. Therefore, if the employee takes 3 1/2 days off, the employer should make the deduction for three days only. The employer can also deduct her pay in certain hiring and termination situations. The employer can pay a salaried employee only for the days she works during such instances. For example, if her last day worked is the fourth day of the biweekly pay period, the employer can pay her for four days instead of 10 days.

Exemption

Salaried employees are often classified as exempt because most are excluded from the Fair Labor Standards Act (FLSA) overtime protection laws. If exempt, the employee does not qualify for overtime pay. But the employee must meet certain FLSA salary guidelines to have exempti status. Most salaried employees must receive a minimum salary of $455 per week or $23,600 per year and perform job duties specific to their position to qualify for exempt status. According to the DOL, exempt employees include executive, administrative, professional and outside sales workers and some computer workers. Additionally, highly compensated workers earning at least $100,000 or more annually are typically exempt.

If the salaried employee does not meet the FLSA wage or job related guidelines, she's a nonexempt salaried employee. In this case, she qualifies for overtime. Notably, an employee can be exempt yet be paid on an hourly basis in some cases (for example, school teachers and doctors). Employers should contact their state labor board if confused about salary labor laws. Furthermore, the employer should ensure that it makes proper deductions to a salaried employee's pay. If not, it can lose the exemption, which would make the employee nonexempt and therefore eligible for overtime pay.

About the Author

Grace Ferguson has been writing professionally since 2009. With 10 years of experience in employee benefits and payroll administration, Ferguson has written extensively on topics relating to employment and finance. A research writer as well, she has been published in The Sage Encyclopedia and Mission Bell Media.