What Laws Govern Salaried Employees?

The Fair Labor Standards Act governs payment to salaried employees, including issues of overtime and absences. The Department of Labor administers federal laws related to salaried workers.

The base pay of a salaried employee cannot change based on the quality of the work performed. Employers are required to pay exempt, or salaried, employees the full amount of their base salary minus any permissible deductions. Employers can legally deduct from salaried employees’ pay when the workers are voluntarily absent for a full day or more due to reasons other than illness or disability. Laws also allow full day deductions for disciplinary suspension. Employers can legally impose more severe penalties for serious safety violations.

Employers, however, cannot deduct salaried employees’ pay for absences of less than a day. Therefore, salaried employees who show up to work a few minutes late are still entitled to full day’s pay. Salaried employees can use accrued vacation time to cover part-day absences. Once the employees’ vacation pay is exhausted, however, the general rules apply.

Under the Fair Labor Standards Act, employers do not have to pay exempt employees for overtime work. However, employers can choose to reward salaried employees by providing extra compensation for overtime work. The extra pay can come in various forms including bonuses and profit sharing.