I have two questions regarding the salary threshold for exemption. 1) Can a rental discount for an employee who lives onsite at an apartment community managed by his employer count toward the salary threshold for overtime exemption?
2) If a salaried exempt employee takes Family and Medical Leave Act (FMLA) leave during the year, does the company have to add a catch-up payment to get the employee up to the salary threshold for exemption, even though FMLA is unpaid?
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Thank you for your inquiries regarding FLSA salary levels.
First, though the new regulations do allow for certain nondiscretionary bonuses and incentive payments to satisfy up to 10 percent of the standard salary level test, the regulations do not change the exclusion of “board, lodging, or other facilities” from the salary calculation, as provided by current law at 29 CFR 541.606. This decision to continue to exclude these forms of compensation from the salary level test calculation is discussed here in the new regulations.
Second, under current law, salaried executive, administrative, and professional employees of covered employers who meet the criteria for exemption do not lose their FLSA-exempt status by using unpaid FMLA leave. This special exception to the salary basis requirements for FLSA’s exemption extends only to an eligible employee’s use of FMLA leave. This exception is discussed in this DOL Fact Sheet under “Other Provisions” and in the FMLA regulations at 29 CFR 825.206.
The new FLSA regulations also do not change this exception.
Therefore, as long as the employee meets the exemption requirements (specified duties test, payment on a salary basis, and minimum salary payment of $913 for every week in which work is performed), then the employee’s use of FMLA will not affect his or her FLSA exemption.
This exception also applies to the use of reduced schedule or intermittent leave. Specifically, “the employer may make deductions from the employee’s salary for any hours taken as intermittent or reduced FMLA leave within a workweek without affecting the exempt status of the employee.”
For additional information on the new regulations in general, you may find this collection of Frequently Asked Questions regarding the application of the new regulations helpful.