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*Note: The Department of Labor revised the regulations located at 29 C.F.R. part 541 with an effective date of January 1, 2020. WHD will continue to enforce the 2004 part 541 regulations through December 31, 2019, including the $455 per week standard salary level and $100,000 annual compensation level for Highly Compensated Employees. The final rule is available at: https://www.federalregister.gov/documents/2019/09/27/2019-20353/defining-and-delimiting-the-exemptions-for-executive-administrative-professional-outside-sales-and.

(Revised September 2019) (PDF)

This fact sheet provides information on the salary basis requirement for the exemption from minimum wage and overtime pay provided by Section 13(a)(1) of the FLSA as defined by Regulations, 29 C.F.R. Part 541.

The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.

However, Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees employed as bona fide executive, administrative, professional and outside sales employees. Section 13(a)(1) and Section 13(a)(17) also exempt certain computer employees. These exemptions are often called the “white-collar” or “EAP” exemptions. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $684* per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department’s regulations.

See other fact sheets in this series for more information on the exemptions for executive, administrative, professional, computer and outside sales employees.

Salary Basis Requirement

To qualify for exemption, employees generally must be paid at not less than $684* per week on a salary basis. These salary requirements do not apply to outside sales employees, teachers, and employees practicing law or medicine. Exempt computer employees may be paid at least $684* on a salary basis or on an hourly basis at a rate not less than $27.63 an hour.

Being paid on a “salary basis” means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. The predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work. Subject to exceptions listed below, an exempt employee must receive the full salary for any week in which the employee performs any work, regardless of the number of days or hours worked. Exempt employees do not need to be paid for any workweek in which they perform no work. If the employer makes deductions from an employee’s predetermined salary, i.e., because of the operating requirements of the business, that employee is not paid on a “salary basis.” If the employee is ready, willing and able to work, deductions may not be made for time when work is not available.

Employers may use nondiscretionary bonuses and incentive payments (including commissions) paid on an annual or more frequent basis, to satisfy up to 10 percent of the standard salary level. Additionally, if after the 52-week period, the employer has not met its financial obligation, the employer can make a final “catch-up” payment within one pay period after the end of the 52-week period to bring an employee’s compensation up to the required level. Any such catch-up payment will count only toward the prior year’s salary amount and not toward the salary amount in the year in which it is paid.

Circumstances in Which the Employer May Make Deductions from Pay

Deductions from pay are permissible when an exempt employee: is absent from work for one or more full days for personal reasons other than sickness or disability; for absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness; to offset amounts employees receive as jury or witness fees, or for military pay; for penalties imposed in good faith for infractions of safety rules of major significance; or for unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions. Also, an employer is not required to pay the full salary in the initial or terminal week of employment, or for weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act.

Effect of Improper Deductions from Salary

The employer will lose the exemption if it has an “actual practice” of making improper deductions from salary. Factors to consider when determining whether an employer has an actual practice of making improper deductions include, but are not limited to: the number of improper deductions, particularly as compared to the number of employee infractions warranting deductions; the time period during which the employer made improper deductions; the number and geographic location of both the employees whose salary was improperly reduced and the managers responsible; and whether the employer has a clearly communicated policy permitting or prohibiting improper deductions. If an “actual practice” is found, the exemption is lost during the time period of the deductions for employees in the same job classification working for the same managers responsible for the improper deductions.

Isolated or inadvertent improper deductions will not result in loss of the exemption if the employer reimburses the employee for the improper deductions.

Safe Harbor

If an employer (1) has a clearly communicated policy prohibiting improper deductions and including a complaint mechanism, (2) reimburses employees for any improper deductions, and (3) makes a good faith commitment to comply in the future, the employer will not lose the exemption for any employees unless the employer willfully violates the policy by continuing the improper deductions after receiving employee complaints.

Fee Basis

Administrative, professional and computer employees may be paid on a “fee basis” rather than on a salary basis. If the employee is paid an agreed sum for a single job, regardless of the time required for its completion, the employee will be considered to be paid on a “fee basis.” A fee payment is generally paid for a unique job, rather than for a series of jobs repeated a number of times and for which identical payments repeatedly are made. To determine whether the fee payment meets the minimum salary level requirement, the test is to consider the time worked on the job and determine whether the payment is at a rate that would amount to at least $684* per week if the employee worked 40 hours. For example, an artist paid $350 for a picture that took 20 hours to complete meets the minimum salary requirement since the rate would yield $700 if 40 hours were worked.

Where to Obtain Additional Information

For additional information, visit our Wage and Hour Division Website: http://www.wagehour.dol.gov and/or call our toll-free information and helpline, available 8 a.m. to 5 p.m. in your time zone, 1-866-4USWAGE (1-866-487-9243).

When state law differs from the federal FLSA, an employer must comply with the standard most protective to employees. Links to your state labor department can be found at www.dol.gov/agencies/whd/contact/local-offices.

This publication is for general information and is not to be considered in the same light as official statements of position contained in the regulations.

PARACHUTE SYSTEM

This parachute system provides superior glide performance and includes a wrist altimeter to time the release of the chute. The system also comes equipped with an oxygen mask and oxygen bottle for HALO (High Altitude Low Opening) jumps.

LOW-PROFILE BELT

This utility belt is used for extra storage of necessary mission-essential equipment, including a magazine dump pouch, knife, multitool, personal medical kit, pistol holster and extra ammunition.

TOUGHBOOK COMPUTER

To stay connected while conducting missions in remote parts of the world, Special Operators pack a variety of gear, including a Toughbook computer for high-performance communication.

M4 CARBINE RIFLE

The assault rifle of choice for Special Operators, the M4 carbine comes equipped with holographic hybrid 3x magnifier, infrared laser-aiming system, an infrared flashlight and a modified collapsible stock.

GPS

When operating in remote regions of the globe, operators rely on military-grade, ruggedized GPS.

TACTICAL BODY ARMOR

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Maximizing protection while minimizing interference, this tactical body armor incorporates integrated magazine and accessory pouches enabling Special Operators to carry out the mission safely and effectively.

BALLISTIC HELMET

The ballistic helmet features a dual communication system, night-vision goggles and infrared strobe lighting to mark friendly positions.

TACTICAL ASSAULT KIT

To track friendly forces during a battle as well as for target nomination, Special Operators rely on the Tactical Assault Kit, which is a digital mapping system that includes global positioning.

GLOCK 19 SIDEARM

Because of its compact size and versatility, the 9mm is the ideal sidearm for Special Operators as a backup defense system.

HIGH-INTENSITY IR LASER

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To let aircraft know of their location and to designate enemy positions during nighttime missions, Special Operators will use an advanced high-intensity infrared laser.

POCKET LASER RANGE FINDER

The pocket laser range finder with a built-in compass comes in handy for targeting during the daytime and measuring the dimensions of landing zones.

DIVE GEAR

Air Force Special Operators are highly trained divers that employ everything from wireless transceivers, to transmit and receive underwater communications, to an Integrated Diving Vest and a compass with a bottom timer and depth gauge.

MULTIBAND RADIO

Equipped with GPS, this multiband programmable radio is used for inter-team communication and communication with aircraft as well as satellite communication.

TACTICAL MEDICAL KIT

When responding to emergencies, Special Operators must act as a one-person ER. Operators are equipped with a range of supplies, including IV catheters and fluid warmer to combat hypothermia, a bag valve mask to force ventilation and seals/bandages to cover wounds.

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TECHNICAL RESCUE KIT

To free people trapped in a variety of armored vehicles or downed aircraft, Special Operators carry a number of tools such as a concrete saw, a Sawzall and a combi tool, which combines lift and cutting ability.

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