Figuring out how to legally pay the
salaried employee can be an extremely frustrating and complex experience - unless you have instant access to analysis of the Fair Labor Standards Act (FLSA) regulations.
Understanding compensation issues relating to the salaried employee
Just because an employee is on salary does not mean that you do not have to pay him or her overtime. If a salaried employee were determined to be a nonexempt (from overtime) employee, the overtime rate is 1 1/2 times their regular rate of pay. The regular rate must include: the reasonable cost of meals, lodging, and other facilities provided to the employees (NOT for the benefit of the employer), nondiscretionary bonuses, on-call pay, shift differentials, and cash benefit payments from Section 125 Cafeteria Plans and other forms of compensation not specifically excluded from overtime laws by the FLSA.
There are a number of guidelines, rules, and definitions that apply to salaried employees that you must follow under the Fair Labor Standards Act. The FLSA regulations are designed to preclude an employer from setting an artificially low rate of pay on which overtime is calculated, and then providing additional compensation to the employee by other means.
Reliable Salary Data on Hundreds of Jobs - in Seconds
To find out more about how to pay your salaried employee under FLSA rules and definitions, start a free trial at Compensation.BLR.com, the most reliable source for compensation data and practical, plain-English compensation help.
Compensation.blr.com has many tools and resources to help make your job easier. The Salary Center lets you produce custom salary reports for hundreds of jobs by state, region, size, and type of company. Benefits data, bonus and incentive data are all available. Or, use the Performance Appraisal Wizard to rate your employees fairly with its easy to use 8 step wizard.
The compensation Library has more salaried employee resources like these:
How to calculate overtime with for employees on a salary
Overtime calculations with fixed or irregular weeks
Overtime Exemptions under FLSA