Aberrant Paycheck Errors Do Not Change Salary Basis for Exempt Employee
Under the Fair Labor Standards Act, white collar employees serving in an administrative exempt category must be paid on a salary basis of at least $455 per week, among other criteria. The exemption is lost if it is demonstrated that the employer does not intend to pay employees on a salary basis, such as having an actual practice of making improper deductions from the salary. According to the First Circuit, a company who failed to pay a customer service manager his full salary on two paychecks did not lose the exemption. “We conclude that two aberrant paychecks out of the approximately 50 that [the manager] received do not amount to an ‘actual practice’” of improper deductions, the Court rules. Cash v. Cycle Craft Co.


