DOL: How to pay exempt workers a variable salary.

Position:Washington Report
 
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A new Department of Labor opinion letter clarifies the tricky matter of paying exempt employees a salary that may sometimes fluctuate. The problem: Does the Fair Labor Standards Act allow an employee to be considered exempt if they are paid a salary that is computed on an hourly, daily or per-shift basis? Under the FLSA, that is not a problem if two conditions apply:

  1. The employee is guaranteed a minimum weekly salary regardless of the number of hours, days or shifts worked.

  2. There is a reasonable relationship between the guaranteed amount and the amount actually earned.

The question answered by the new opinion letter: What is the definition of a "reasonable"...

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