What rules apply when employers make “extra” payments to exempt employees?

As the year ends, many exempt employees may earn additional compensation on top of their salaries.  This may include bonuses, commissions or percentages of a company’s profits.    These payments are often expected and are warranted.  Further, these payments are proper pursuant to the Fair Labor Standards Act (FLSA), which provides that certain workers may be exempt (not entitled to overtime pay), if they meet the salary basis (currently set at $23,600) and fall into one of the exempt categories (administrative, professional or executive).

Although extra-compensation in the form of bonuses, commission, etc. are welcomed, employers should make sure that these payments are not the primary source of pay.  If it is the primary source of pay, then it may be necessary to reevaluate the amounts paid to ensure that employees are paid at least the minimum salary threshold.  Otherwise, the employee may be mis-classified and entitled to overtime pay.    Additionally, exempt employees may be able to be paid on an “hourly” or “shift” basis, rather than salaried, as long as they make an amount guaranteed to be in excess of the minimum weekly amount.

For more information or if you have any wage and hour question, please contact the dedication Atlanta wage and hour lawyers at Buckley Bala Wilson Mew LLP for an immediate case evaluation.