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Payment on a Fee Basis Under the FLSA

By Michael Miller on November 14, 2011
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Under the Fair Labor Standards Act (FLSA) and Minnesota state law, administrative and professional employees may be paid on a “fee basis” rather than on a salary basis.  An employee is considered to be paid on a fee basis when the employee is “paid an agreed sum for a single job regardless of the time required for its completion.”  Fee basis payments are similar to piecework payments except that a “fee” is typically paid for a unique job as opposed to a “a series of jobs repeated an indefinite number of times . . . for which payment on an identical basis is made over and over again.”  Payments based on the number of hours or days worked instead of the accomplishment of a single task are not considered payments on a fee basis.  See 29 C.F.R. § 541.605(a).
To determine whether a fee payment meets the minimum amount required for the administrative and professional exemptions under the FLSA, the amount paid to the employee is tested by determining the time worked on the job and whether the fee payment is at a rate that would satisfy the minimum salary requirements if the employee worked 40 hours.  See 29 C.F.R. § 541.605(b).

  • Posted in:
    Employment & Labor
  • Blog:
    Minnesota Employer
  • Organization:
    Taft Stettinius & Hollister LLP
  • Article: View Original Source

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