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Under the
Fair Labor Standard Act (FSLA) employers are required to pay employees overtime (1.5 times their regular rate of pay) if their weekly hours worked exceed 40. There are exemptions under the FLSA and employers do not have to pay overtime to certain employees. These exemptions are executive, professional, computer, outside sales, and other highly compensated employees.
In order for an employee to be considered exempt they must pass three tests, the salary level test, the salary basis and the duties test. An employee can be considered exempt when they are paid on a fixed salary basis meaning they receive the same amount every pay period. The minimum salary amount an employee can be paid a week and still be considered exempt is $455.
A salary level cannot be reduced because of a change in the amount of or quality of work performed. Although there are a few exceptions, exempt employees must be paid their full salary if they worked at all during a work week – regardless of the number of hours or days. However if an exempt employee did not work at all in a given week, they are not entitled to their salary.
A fee basis can be paid to administrative and professional employees as long as it meets the minimum requirement to be considered exempt. If the rate for one hour of work equals $455 when multiplied by 40 hours, the employee can be considered exempt even though they are paid on a fee basis.
The Compensation Library has more current compensation plan resources like these:
Wage and Hour law
Minimum Wage Rates - State by State Comparison
Fair Labor Standards Act
State and regional compensation data
Compensation Plan Administration