1.) The employee must be paid a pre-determined and fixed salary that is not subject to reduction because of variations in the quantity and quality of the work performed (The Salary Basis Test). 2.) The amount of salary paid must be a least $ 455.00 per week (The Salary Level Test). 3.) The employee’s job duties must primarily involve executive, administrative, professional, computer or outside sales duties (The Duties Test).
In order to meet the Salary Basis Test, the employee must receive, subject to a few identified exceptions, a full weekly salary for any week in which the employee performs any work without regard for the number of days or hours worked. The regulations permit employers to deduct from the employee’s salary one or more full days without jeopardizing the employees exempt status for the following reasons:
1.) Absences for personal reasons other than sickness and disability. 2.) Absences for sickness and disability (including work related accidents) if
the deduction is made pursuant to a bona fide plan or policy of providing compensation for salary lost due to illness. 3.) To offset amounts employees receive for jury duty, witness fees, of for
military duty. 4.) For penalties imposed in good faith for infractions of safety rules of a
major significance. 5.) For disciplinary suspensions imposed in good faith for workplace conduct
rules that are imposed pursuant to a written policy applicable to all employees. 6.) A proportionate part of the employee’s full weekly salary can be paid for
the initial and terminal week of employment. 7.) For unpaid leave taken pursuant to the Family Medical Leave Act.
Loss of exemptions due to improper deductions will be based on the facts an circumstances relating to the improper deductions. An employer can safe harbor its exemptions by adopting a policy that prohibits improper deductions, provides a complaint mechanism, reimburses employees for any improper deductions, and generally exhibits a good faith effort to comply with the requirements.
In order to meet the Salary Level Test, an employee must receive a salary of at least $ 455.00 per week. Costs incurred by the employer in providing the employee with board, lodging, and other facilities due not count toward the minimum salary. For computer employees the salary requirement may be met by an hourly payment of at least $ 27.63.
The Duties Test is satisfied by looking at the primary duties of each employee as opposed to job titles. Each case is based on the individual facts and circumstances of