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Department of Labor Overtime Rule FAQs


National Golf Course Owners Association FAQs

This information is provided for informational purposes only. The contents are presented with no warranty, either expressed or implied the National Golf Course Owners Association. No legal responsibility is assumed for the outcome of decisions, commitments or obligations made on the basis of this information. If your business is faced with a question concerning legal issues, you should contact the business legal counsel for the specific application of the law to your situation.

We pay our assistant professional a salary of $28,000 plus they earn an additional $4,000 to $6,000 in lesson income. In season, their work schedule is typically 50 to 55 hours per week. What are our options to comply under the new overtime rule?

Answer: First, I will assume the person is currently identified as an exempt employee. The best course of action for this position is to reclassify as non-exempt, because the salary increase would be so significant and either curb his/her hours, or figure out a new compensation structure. As for the income from lessons, if the pro is being paid that additional lesson income from the course, that amount needs to be included into regular rate calculations for overtime purposes, but if the students are paying those amounts directly to the pro, it is not compensation from the employer and not includable in regular rate. It is important to note that the Assistant Golf Professional may not meet the criteria of the Learned Professional or Executive Test; however, if they directly supervise two or more full-time equivalent employees, they may meet the Executive Exemption. The Learned Professional Test exemption may apply to the Head Professional; however, this is currently being reviewed and an update will be published when made available.

 

Our head professional receives an annual salary of $35,000, but also owns the golf shop merchandise and retains all profits from sales, plus they receive income from lessons and a commission on golf car fees and outing revenue. Last year, their additional income from these sources was $40,000, making their total income $75,000. What will we be required to do under the new overtime rule to comply?

Answer: This is a complicated scenario, and it is assumed the pro’s ownership of the golf shop is effectively a separate business (as it would have to be in order to be lawful as described above), so none of that income should be considered earnings arising from employment that can be used to meet the salary test. If the course pays the lesson income directly to the pro (and from what I understand, this is usually not the case), that can be used to meet the salary test, but then it would have to become part of the guaranteed salary up to at least 90 percent of the salary test minimum. Under the new rule that allows up to 10 percent of the salary test minimum to be provided in the form of incentive compensation, additional lesson income paid directly by the course and commissions could cover the remaining 10 percent, but the owner needs to remember that if the commissions and lesson income do not cover the 10 percent margin, the course has to guarantee it themselves and pay the 10 percent margin at least quarterly. You also have the issue of tax consequences. If lesson income is paid directly from the student to the pro, the pro is responsible for the tax implications. But if the course owner pays it, they have to withhold on those amounts, pay the employer side taxes, etc. You also have the same issue above as to whether this person meets the duties test, but as the head pro, there may be a better likelihood that the pro supervises at least two FTEs and could qualify for the executive exemption. The best recommendation here may be the same as above–convert to non-exempt and figure out a new compensation structure, but the commission and outing revenue will need to be calculated into regular rate.

 

Our facility employs a teaching professional who receives an annual retainer of $18,000 for designated golf shop and tournament operations duties, but they earn an additional $40,000 from golf instruction, so their total income is well above the new salary threshold. How will we need to restructure this arrangement to comply with the new overtime rule?

Answer: Based on the above description this employee would not meet the Learned Professional or the Executive Exemption tests. Assuming the $40K comes directly from students, not the employer, and therefore is not properly included in salary. Based on how this work is structured, it may be lawful to convert this position to an independent contractor/consultant position, although that is rife with its own dangers. That said, I see enough here to suggest it could be lawful–it would depend on how much control the course owner exerts when the pro is performing the duties, what the pro does with his/her other time, etc. But the compensation structure is not going to meet the salary test, so they would either need to explore the possibility of a 1099 relationship or classification as non-exempt.

 

Our facility pays our assistant professionals using the “Fixed Salary for Fluctuating Hours” method as described in the PGA Wage and Hour Manual. Will this method of payment continue to be acceptable under the new overtime rule, and if so what steps will we need to take to comply?

Answer: As in question No. 1, this position may not qualify under any of the exempt categories. The fluctuating work week law only applies to non-exempt positions, since you are already treating this position as non-exempt and the new OT regulations and salary test would not apply to this position. One thing to take note of is that the fluctuating work week is a federal standard and it may not work in certain states (California does not recognize it under its own overtime laws because of the requirement to pay daily overtime, for example).

 

Our golf facility is open for seven months out of the year and closed the other five months. What requirements must be met to be a “seasonal facility/business” and would this have an effect on the overtime laws for our facility?

Answer: Given the stakes involved, it is advised that it would be worth the investment to have an attorney do an assessment and provide a formal legal opinion on whether the exemption applies. The exemption can be so valuable if it applies, but the liability so significant if it is misapplied, that it’s worthwhile. Even if the entire operation only runs seven months of the year, it would be smart to at least have a legal audit to confirm none of the nuances mentioned above are problematic.

 

One of our assistant professionals is an 8 to 9 month seasonal salaried position and typically works more than 40 hours per week during the season. Will the new annual salary threshold be prorated or calculated on a weekly basis for seasonal jobs? If not, what are our options under the new overtime rule?

Answer: There is no “part-time” proration allowed to the salary test, but remember that while we normally refer to the salary test in terms of an annual salary (because that is the common way of looking at most jobs), the technical legal rule is that the salary test must be satisfied for every workweek–not based on annual figure. So while the new salary test is being spoken about in terms of a minimum $47,476 annual salary, at a more technical level, it’s actually $913/week. If this position satisfies the duties test and the salary for the position is at least $913/week for all work weeks in which the employee works, it will be an exempt position even though the annual earnings will be below $47,476. Note: Assistant Golf Professionals may not meet the Duties Test of either the Learned Professional or the Executive.

 

Can a golf club pay an assistant professional a $35,000 salary and have them work 50-plus hours?

Answer: Yes, you can work an employee as many hours as the job requires, but you are responsible for paying overtime for all hours greater than 40 in a workweek. Under the above scenario, the employee would be paid $16.83 for the first 40 hours in the work week and $25.24 per hour for the 10 overtime hours, thus their pay for that workweek would be $925.60, which is greater than the $913/week required under the new Overtime Rule. You may want to consider a fluctuating work week for this non-exempt employee.

 

Is there a precedent of using the $913 a week or the $47,476 a year? Does it matter which one is used? Does the $913 a week specifically pertain to seasonal employees?

Answer: The $913/week pay applies to all exempt employees. There is no “part-time” proration allowed to the salary test, but remember that while we normally refer to the salary test in terms of an annual salary (because that is the common way of looking at most jobs), the technical legal rule is that the salary test must be satisfied for every workweek – not based on annual figure. So while the new salary test is being spoken about in terms of a minimum $47,476 annual salary, at a more technical level, it’s actually $913/week. If this position satisfies the duties test and the salary for the position is at least $913/week for all work weeks in which the employee works, it will be an exempt position even though the annual earnings will be below $47,476.

 

There seems to be some confusion and questions from members on the 10 percent provision, specifically:

  • Does the 10 percent mean 10 percent of the salary threshold, or 10 percent of what they earn in bonuses and incentives?

    Answer: The 10 percent is the 10 percent of the salary threshold. So you can pay a base salary of 90 percent of the weekly or annual amount and have the remaining 10 percent made up by “incentive” compensation. But if the employee’s work toward the incentive does not result in satisfying the remaining 10 percent, then the employer has to guarantee that amount and true it up at least quarterly. For more on bonus pay click here.

  • Does the 10 percent also apply to lessons, commissions, and profits earned from golf shop ownership and other concessions?

    Answer: It also needs to come from earnings they get from their employment that would be paid by the employer as discussed previously.

 

There has been ongoing misinterpretation for years on (1) whether assistant professionals meet the “white collar duties” test to qualify as exempt salaried employees, and (2) what defines “hours worked” for both salaried and hourly employees (i.e. teaching, playing golf with members, playing in tournaments, etc.). This would be a good time to clarify both of these areas.

Answer: As noted earlier, the determination as to whether or not Assistant Professional meet the Duties Test requires clarification. This is being reviewed and we will update when we have appropriate response.

 

PGA Professionals in our section earn a salary of less than $47,476, including commissions from carts and guest fees. The PGA Professional owns the golf shop and retains 100 percent of his golf lessons. A combination of all income (salary, cart, guest fees, lessons golf shop profits) will exceed $47,476, but lessons and golf shop sales are not included in his salary. Will the club be responsible to pay overtime to the Head Professional or will his lessons and golf stop profits figure into the total compensation?

Answer: As noted in question No. 2 above, this is a complicated scenario, and it is assumed the pro’s ownership of the golf shop is effectively a separate business (as it would have to be in order to be lawful as described above), so none of that income should be considered earnings arising from employment that can be used to meet the salary test. If the course pays the lesson income directly to the pro (and from what I understand, this is usually not the case), that can be used to meet the salary test, but then it would have to become part of the guaranteed salary up to at least 90 percent of the salary test minimum. Under the new rule that allows up to 10 percent of the salary test minimum to be provided in the form of incentive compensation, additional lesson income paid directly by the course and commissions could cover the remaining 10 percent, but the owner needs to remember that if the commissions and lesson income do not cover the 10 percent margin, the course has to guarantee it themselves and pay the 10 percent margin at least quarterly. You also have the issue of tax consequences–if lesson income is paid directly from the student to the pro, the pro is responsible for the tax implications. But if the course owner pays it, they have to withhold those amounts, pay the employer side taxes, etc. You also have the same issue above as to whether this person meets the duties test, but as the head pro, there may be a better likelihood that the pro supervises at least two FTEs and could qualify for the executive exemption. The best recommendation here may be the same as above–convert to non-exempt and figure out a new compensation structure, but the commission and outing revenue will need to be calculated into regular rate. You may also consider reclassifying his position to non-exempt, then track closely the hours in which he/she works directly for the primary golf course operation versus managing his golf shop and lesson program. This would require employee to clock in and out. This would most likely result in the employee working less than the 40 hours/week for the primary golf course.

 

This information is provided for informational purposes only. The contents are presented with no warranty, either expressed or implied the National Golf Course Owners Association. No legal responsibility is assumed for the outcome of decisions, commitments or obligations made on the basis of this information. If your business is faced with a question concerning legal issues, you should contact the business legal counsel for the specific application of the law to your situation.

 


The following FAQs were provided by the Club Managers Association of America

We are only open eight months a year? How does this impact us?

Answer: The new salary requirement is $913 per week. During the eight-month period that employees work at your property, you will need to guarantee that at least $913 per week is paid for an exempt employee. Please see FOH 22g10 concerning rules for annual salary earned in a shorter period, which can be found at the following link: www.dol.gov/whd/FOH/FOH_Ch22.pdf

 

With regard to the non-discretionary bonus and catch up payment provisions, does “quarterly” mean calendar quarter? Fiscal quarter? Or is it up to the employer’s discretion?

Answer: No, it does not mean the calendar quarter. It is the employer's discretion when the quarter will begin. It is very important to remember that these amounts must be paid at least quarterly, and employees must be paid at least 90% (~$822 per week) of their standard salary in any week in which they perform any work.

 

Can an employer use a Holiday bonus as part of your salary in effort to meet the new standard?

Answer: When the Final Rule takes effect on December 1, 2016, employers will newly be allowed to satisfy up to 10 percent of the standard salary level with nondiscretionary bonuses and incentive payments (including commissions). Nondiscretionary bonuses and incentive payments are forms of compensation promised to employees, for example, to induce them to work more efficiently or to remain with the company. By contrast, discretionary bonuses are those for which the decision to award the bonus and the payment amount is at the employer's sole discretion and not in accordance with any preannounced standards. An unannounced holiday bonus would qualify as a discretionary bonus, because the bonus is entirely at the discretion of the employer, and therefore could not satisfy any portion of the $913 standard salary level.

 

Do I have to make my exempt employees clock in and out?

Answer: If the salaried professionals are bona fide exempt employees as defined in 29 CFR Part 541.300, there is not a recordkeeping requirement. However, if the salaried professionals do not meet all the requirements for the exemption, including the salary level, there are recordkeeping requirements that can be found in 29 CFR Part 516, which would be applicable to them. Furthermore, overtime-eligible workers are not required to punch a time clock. Employers have options for accounting for workers' hours - some of which are very low cost and burden. There is no particular form or order of records required and employers may choose how to record hours worked for overtime-eligible employees. For example, where an employee works a fixed schedule that rarely varies, the employer may simply keep a record of the schedule and then indicate the changes to the schedule that the worker actually worked when the worker's hours vary from the schedule ("exceptions reporting"). See Fact Sheet 21: Recordkeeping Requirements under the Fair Labor Standards Act: www.dol.gov/whd/regs/compliance/whdfs21.htm. For employees with a flexible schedule, an employer does not need to require an employee to sign in each time she starts and stops work. The employer must keep an accurate record of the number of daily hours worked by the employee, not the specific start and end times. So an employer could allow an employee to just provide the total number of hours she worked each day, including the number of overtime hours, by the end of each pay period. The Department has material available to help employers figure out what method of recording hours works best for their workforce.

 

What options do I have for compliance? Can I “legally” make someone hourly who has previously been exempt?

Answer: The new overtime regulations are a complicated issue for clubs. Employers have a range of options for responding to the updated standard salary level. For each affected employee newly entitled to overtime pay, employers may:

  • Increase the salary of an employee who meets the duties test to at least the new salary level to retain his or her exempt status;

  • Pay an overtime premium of one and a half times the employee's regular rate of pay for any overtime hours worked;

  • Reduce or eliminate overtime hours;

  • Reduce the amount of pay allocated to base salary (provided that the employee still earns at least the applicable hourly minimum wage) and add pay to account for overtime for hours worked over 40 in the workweek, to hold total weekly pay constant; or

  • Use a hybrid of these options.

Other suggestions would include:

  • Identifying work tasks that could be delegated to part-time employees.

  • Re-evaluate activities that are working hours but are not providing important value/service to your members (think lengthy staff meetings).

  • Consider changing the days of your workweek (i.e., if you workweek ends on a Sunday but it is your busiest day of the week.)

  • Consider using the fluctuating workweek method of calculating overtime for non-exempt employees who do not work regular schedules.

 

In regards to assistant golf or tennis professions, is there a way to count their lesson pay as their overtime pay? Do you have any suggestions on how to structure their pay so that we don’t end up paying them too much extra for doing a lesson?

Answer: Unfortunately, lesson pay cannot be used to pay in lieu of overtime for these non-exempt employees. Those employees would be eligible for time and a half regardless of any extra compensation. Generally, the assistant level positions do not quality for any of the exemption categories, regardless of salary level.

 

Given the new rules, would gratuity or mandatory service charges that are directly distributed to the employee be considered as part of “salary” or could you look at them as part of bonus/commission which could satisfy up to 10% of the new threshold?

Answer: The new rules do not specify this. However, based on legal opinion, mandatory service charges would most likely be viewed as falling under the definition of salary. Gratuities (i.e., tips) are a little more risky in that they can vary according to the member’s satisfaction with the service. On the other hand, they can be viewed as a “commission” on the service provided. At this time, it is safe to count mandatory service charges as part of the salary paid to each server and count gratuities as commissions falling under the 10% rule.

 

What is the impact to the fluctuating workweek method of calculating overtime?

Answer: None at this time. The fluctuating workweek method permits employers to pay non-exempt employees a fixed salary, even if the employees’ hours fluctuate from week-to-week, and permits employers to meet their overtime obligations by paying an additional one-half the regular rate of pay (instead of an additional 1.5 times the regular rate of pay). Under this method, the fixed salary is deemed to compensate employees for all straight time hours, whether under or over 40 hours in a workweek. To use this method, there must be a mutual understanding between the employer and employee that the fixed salary is compensation (apart from overtime premiums) for the hours worked each workweek, whatever their number, rather than for working 40 hours or some other fixed weekly work period; this understanding should be memorialized in writing. In addition, the fixed salary must be sufficient to provide compensation to the employee at a rate not less than the applicable minimum wage rate for every hour worked in those weeks in which the number of hours worked is the greatest, and the employee must receive at least one-half the employee’s regular rate of pay for all overtime hours in addition to the fixed salary. Although this method will not eliminate the extra costs of converting an employee from exempt to non-exempt status, it will reduce those costs. In addition, because currently exempt employees are already paid a guaranteed weekly salary, it will be easy to meet the fixed salary requirement to qualify for the fluctuating workweek method. Bear in mind, however, that the fluctuating workweek method is not permitted under the laws of certain states, such as California.

 

What is a Highly Compensated Employee?

Answer: An HCE is one defined as those performing office or non-manual work and paid total annual compensation of $134,004 or more (which must include at least $913 per week paid on a salary or fee basis) are exempt if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee. (Note: An HCE generally does not meet all of the duties tests for exemptions.) In the club setting, the chief financial officer/controller/lead accountant may qualify in this category. For more information, click here: https://www.dol.gov/whd/overtime/fs17h_highly_comp.pdf.

 

What is the difference between nondiscretionary and discretionary bonuses?

Answer: Nondiscretionary bonuses and incentive payments (including commissions) are forms of compensation promised to employees to induce them to work more efficiently or to remain with the company. Examples include bonuses for meeting set production goals, retention bonuses, and commission payments based on a fixed formula. By contrast, discretionary bonuses are those for which the decision to award the bonus and the payment amount is at the employer's sole discretion and not in accordance with any preannounced standards. An example would be an unannounced bonus or spontaneous reward for a specific act.

 

What is a workweek? Does it have to be Monday to Sunday?

Answer: An employee's workweek is a fixed and regularly recurring period of 168 hours - seven consecutive 24-hour periods. It need not coincide with the calendar week but may begin on any day and at any hour of the day. Once the beginning time of an employee's workweek is established, it remains fixed regardless of the schedule of hours worked by the individual. The beginning of the workweek may be changed if the change is intended to be permanent and is not designed to evade the overtime requirements of the Act.

 

We currently cover other fringe benefits for our employees including housing, education, uniform/clothing allowances, etc. Can we count any of this towards meeting the salary threshold?

Answer: The salary level does not include payments for medical, disability, or life insurance, or contributions to retirement plans or other fringe benefits like housing, education or clothing allowances.

 

How does the law apply within my state?

Answer: The Fair Labor Standards Act (FLSA) is the federal wage and hour law that applies nationwide. Its coverage principles (including the $500,000 annual dollar volume threshold to establish enterprise coverage) and the criteria for the "white collar" overtime exemptions are the same in all 50 states. However, some states or localities may have their own wage and hour laws that are more protective of workers. For more information, click here: https://www.dol.gov/whd/contacts/state_of.htm.

 

This information is provided for informational purposes only. The contents are presented with no warranty, either expressed or implied the Club Managers Association of America. No legal responsibility is assumed for the outcome of decisions, commitments or obligations made on the basis of this information. If your club is faced with a question concerning legal issues, you should contact the club’s legal counsel for the specific application of the law to your situation.

 


The following FAQs were taken from the Department of Labor website

With regard to the non-discretionary bonus and catch up payment provisions, does “quarterly” mean calendar quarter? Fiscal quarter? Or is it up to the employer’s discretion?

Answer: No, it does not mean the calendar quarter. It is the employer's discretion when the quarter will begin.

 

Can an employer say that an Xmas bonus is part of your salary in effort to meet the new standard?

Answer: When the Final Rule takes effect on December 1, 2016, employers will newly be allowed to satisfy up to 10 percent of the standard salary level with nondiscretionary bonuses and incentive payments (including commissions). Nondiscretionary bonuses and incentive payments are forms of compensation promised to employees, for example, to induce them to work more efficiently or to remain with the company. By contrast, discretionary bonuses are those for which the decision to award the bonus and the payment amount is at the employer's sole discretion and not in accordance with any preannounced standards. An unannounced holiday bonus would qualify as a discretionary bonus, because the bonus is entirely at the discretion of the employer, and therefore could not satisfy any portion of the $913 standard salary level.

 

What is the salary requirement for part time salary workers?

Answer: Whether a worker is full-time or part-time, the standard salary level to qualify for exemption will be $913 per week.

 

Are blue collar workers (i.e. mechanics) able to be classified as salaried exempt or must they be hourly?

Answer: Blue collar workers like mechanics will not qualify for exempt status because they do not pass the duties requirements for exemption, so they are entitled to overtime pay unless another exemption applies. However, nonexempt employees do not have to be paid on an hourly basis.

 

We have salaried professionals whom are not scheduled at any time to work more than 40 hours per week. Do we have to track hours each week to verify that or if the schedule doesn't allow for more hours can we document their schedules and not have them do a time card? We have several of the Officers that are very upset in having to go back to turning in time cards each week.

Answer: If the salaried professionals are bona fide exempt employees as defined in 29 CFR Part 541.300, there is not a recordkeeping requirement. However, if the salaried professionals do not meet all the requirements for the exemption, including the salary level, there are recordkeeping requirements that can be found in 29 CFR Part 516, which would be applicable to them. Furthermore, overtime-eligible workers are not required to punch a time clock. Employers have options for accounting for workers' hours - some of which are very low cost and burden. There is no particular form or order of records required and employers may choose how to record hours worked for overtime-eligible employees. For example, where an employee works a fixed schedule that rarely varies, the employer may simply keep a record of the schedule and then indicate the changes to the schedule that the worker actually worked when the worker's hours vary from the schedule ("exceptions reporting"). See Fact Sheet 21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA). For employees with a flexible schedule, an employer does not need to require an employee to sign in each time she starts and stops work. The employer must keep an accurate record of the number of daily hours worked by the employee, not the specific start and end times. So an employer could allow an employee to just provide the total number of hours she worked each day, including the number of overtime hours, by the end of each pay period. The Department has material available to help employers figure out what method of recording hours works best for their workforce.

 

Bonus - we get up to 25% of our salary (with a fixed formula); does the new law apply?

Answer: Beginning on Dec. 1, 2016, employers may use non-discretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the standard salary level test ($913 per week, beginning on Dec. 1), provided that such payments are made on a quarterly or more frequent basis. Payments promised to the employee ahead of time and calculated according to a fixed formula would likely qualify as non-discretionary. Employers may continue to pay non-discretionary bonuses and incentive payments beyond those necessary to satisfy the salary requirement, but such payments may only satisfy up to 10 percent of the new standard salary level.

 

Will OT be calculated on over 40 a week or 8 a day?

Answer: Under federal law, an employer's obligation to pay overtime pay is always calculated on a workweek basis, not a daily basis. For employees entitled to overtime pay, employers are obligated to pay an overtime premium for any work hours performed beyond 40 in a workweek.

 

Are self-employed individuals who are >2% shareholder employers subject to the minimum salary requirements? Many times we see owners (who consistently work >40 hours/week) with annual salaries less than the threshold. Will they have to increase their salaries, or would they be exempt as owners?

Answer: Business owners - defined in 29 CFR 541.101 as "any employee who owns at least a bona fide 20 percent equity interest in the enterprise in which the employee is employed, regardless of whether the business is a corporate or other type of organization, and who is actively engaged in its management" - are not subject to the salary level requirement. These bona fide business owners would not be affected by the Final Rule's increase to the standard salary level.

 

What are the penalties for employers for non-compliance with the new OT rules?

Answer: Under the FLSA, employers in violation of the law may be responsible for paying any back wages owed to their employees, as well as additional amounts in liquidated damages, civil money penalties, and/or attorney fees. See 29 U.S.C. 216. See also Fact Sheet #44.

 

How do we classify and compensate owners of a company who work full-time and take draws? Can they be listed as a salaried, exempt employee (under the executive exemption) as long as they make the base $47,476? Then whatever draw they make is listed as additional compensation, bonuses, etc.?

Answer: Thanks for your question. The term "Executive employee" includes any employee who owns at least a bona fide 20% equity interest in the enterprise in which the employee is employed, regardless of whether the business is a corporate or other type of organization, and who is actively engaged in management. Such business owners are not subject to the salary level test. For additional information see the requirements of business owners at 29 CFR 541.101. For additional information on "management" please see 541.102. For information on exemptions, click here.

 

Can an employer say that an Xmas bonus is part of your salary in effort to meet the new standard?

Answer: When the Final Rule takes effect on December 1, 2016, employers will newly be allowed to satisfy up to 10 percent of the standard salary level with nondiscretionary bonuses and incentive payments (including commissions). Nondiscretionary bonuses and incentive payments are forms of compensation promised to employees, for example, to induce them to work more efficiently or to remain with the company. By contrast, discretionary bonuses are those for which the decision to award the bonus and the payment amount is at the employer's sole discretion and not in accordance with any preannounced standards. An unannounced holiday bonus would qualify as a discretionary bonus, because the bonus is entirely at the discretion of the employer, and therefore could not satisfy any portion of the $913 standard salary level.

 

Are employers in compliance if they follow the annualized amounts? (Or do they have to make sure they are always in compliance each week?)

Answer: An employee's exempt status - and, if nonexempt, the employee's right to overtime pay - is determined on a weekly basis. Generally, to retain exempt status, an employee must satisfy the duties test and earn at least $913 per week.

 

Quarterly bonus: if an employee is paid between $822 and $913 per week, can the bonus be paid less frequently than quarterly?

Answer: No. To count toward the standard salary level, nondiscretionary bonuses must be paid quarterly or more frequently.

 


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