U.S. · FLSA exemptions
FLSA salary basis test: allowed deductions.
The deductions 29 CFR 541.602 permits without ending the salary basis.
An exempt employee is paid on a salary basis if they regularly receive a predetermined amount each pay period that is not reduced for the quality or quantity of work. Exempt employees must receive full salary for any week in which they work, except for narrow deductions in 541.602(b): full-day personal absences, certain sickness absences under a bona fide plan, unpaid full-day disciplinary suspensions under a written policy, safety rule penalties, the first and last week, and FMLA leave. Partial-day deductions generally are not among them.
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Result
The general rule (541.602(a))
Paid on a salary basis means regularly receiving, each pay period of a week or longer, a predetermined amount that is not subject to reduction because of variations in the quality or quantity of the work performed. An exempt employee must receive the full salary for any week in which they perform any work, regardless of days or hours worked, and need not be paid for a week with no work. Deductions for absences caused by the employer or its operating requirements break the salary basis; if the employee is ready, willing and able to work, no deduction may be made for time when work is not available.
Deduction scenarios from 541.602(b)
| Scenario | Deduction allowed? | Rule |
|---|---|---|
| Personal absence of one or more full days (not sickness) | Yes, full days only | 541.602(b)(1): absent two full days for personal reasons, deduct two days; absent one and a half days, deduct only the one full day. |
| Sickness or disability absence of one or more full days | Yes, if under a bona fide plan | 541.602(b)(2): deduction allowed under a bona fide plan, policy or practice that compensates for sickness or disability; also before the employee qualifies and after leave allowance runs out. |
| Jury duty, witness attendance or temporary military leave | No deduction; offset allowed | 541.602(b)(3): the employer may offset jury fees, witness fees or military pay received for that week against salary. |
| Penalty for a major safety rule infraction | Yes, any amount | 541.602(b)(4) and (c): rules of major significance, imposed in good faith, such as no smoking in explosive plants. |
| Unpaid disciplinary suspension of one or more full days | Yes, under a written policy | 541.602(b)(5): infractions of workplace conduct rules, under a written policy that applies to all employees, imposed in good faith. |
| First or last week of employment | Yes, proportionate pay | 541.602(b)(6): pay a proportionate part for time worked; not allowed for people employed occasionally for a few days. |
| Unpaid leave under the Family and Medical Leave Act | Yes, proportionate | 541.602(b)(7): pay a proportionate part of the salary for time actually worked; 4 unpaid hours of a 40-hour week allows a 10 percent deduction. |
| Part-day absence (for example a late arrival) for personal reasons | No | Not among the 541.602(b) exceptions; only full-day deductions appear for personal and sickness absences. |
| Lack of work, employer closing the business for a day | No | 541.602(a)(2): not paid on salary basis if deductions are made for absences occasioned by the employer or its operating requirements. |
Bonuses (541.602(a)(3))
Up to ten percent of the salary level in 541.600(a) may be met by nondiscretionary bonuses, incentives and commissions paid annually or more often. A catch-up payment is allowed within one pay period after the end of the 52-week period, and a pro rata portion applies to employees who work only part of the period. This does not apply to highly compensated employees under 541.601.
Worked example
An exempt manager misses a Monday and Tuesday for personal errands. The employer may deduct two days. If the same manager arrives three hours late on Wednesday, the employer may not deduct from salary for those three hours. If the manager takes four unpaid hours of FMLA leave in a 40-hour week, 10 percent may be deducted.
Limits
The regulation here is the federal salary basis test only. The effect of improper deductions is dealt with in 541.603, which this page does not cover. State laws may differ.
Sources
- 29 CFR 541.602 Salary basis: general rule, permitted deductions and the ten percent bonus provision. Read November 2, 2026.
Regulation text is the eCFR version current to October 29, 2026. The $684 weekly figure is the number printed in 541.100 and 541.300 in that version, which cite a May 15, 2026 amendment.
Frequently asked questions
What is the salary basis test?
Exempt employees must regularly receive each pay period a predetermined amount that is not reduced because of variations in the quality or quantity of the work performed.
Can an employer dock an exempt employee for a partial-day absence?
Under 541.602(b), deductions for personal and sickness absences are for full days. Partial-day deductions are not listed among the exceptions.
Can exempt employees be suspended without pay?
For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct violations, under a written policy that applies to all employees.
What about FMLA leave?
The employer may pay a proportionate part of the salary for time actually worked in weeks when an exempt employee takes unpaid FMLA leave.
Can bonuses count toward the salary level?
Up to ten percent of the required salary level may be satisfied by nondiscretionary bonuses, incentives and commissions paid annually or more frequently, but not for highly compensated employees.
Not legal advice
This page summarizes federal regulations and agency forms and is not legal advice. State and local law can require more, and exemption and leave questions turn on the facts. An employment attorney or the Department of Labor can confirm what applies to your situation. Everything runs in your browser; nothing you enter is sent anywhere.