The salary basis test helps figure out if someone is exempt from overtime pay under the Fair Labor Standards Act (FLSA). To meet the test, a person has to earn a set salary—not hourly pay—and that salary has to hit a minimum amount.
If they don’t meet the test, they’re considered non-exempt. And that means they’re owed overtime when they work more than 40 hours in a week.
How does the salary basis test affect exempt vs. non-exempt status?
This test is one part of deciding whether a worker is exempt from overtime. To be exempt, they have to meet three main criteria:
Be paid on a salary basis
Earn at least the required minimum
Do specific types of work, like professional, administrative, or executive tasks
Miss one of these? Then the employee is non-exempt and has to be paid overtime.
What is the minimum weekly salary required to meet the salary basis test?
As of 2024, the number is $684 a week. That comes out to $35,568 a year.
The salary has to stay the same every week, no matter how many hours someone works. If pay drops when hours drop, it doesn’t count.
Can an employer make deductions from an exempt employee’s salary?
Only in a few situations. Like when someone takes a full day off for personal reasons. Or when they’re on unpaid leave under the Family and Medical Leave Act.
What employers can’t do is take money out for partial-day absences. That breaks the rules and can cost them—legally and financially.
Does the salary basis test apply to part-time salaried employees?
Yes, but many part-time employees don’t meet the weekly minimum. So even if they’re salaried, they’re usually considered non-exempt.
Bottom line: being salaried doesn’t automatically make someone exempt. It all depends on how much they’re paid and what kind of work they do.
How often do salary thresholds for the test change?
Not very often. But they do go up from time to time. The Department of Labor reviews and updates the threshold when needed.
Employers should keep an eye out. If the rules change and salaries don’t, they might end up misclassifying people without even realizing it.
