Exempt status under the FLSA often requires payment of a fixed salary on the salary basis discussed in the DOL regulations. 29 C.F.R. § 541.602. An employee classified as exempt sometimes asserts that receipt of supplemental compensation beyond the fixed salary renders him a non-exempt employee. Courts, however, have rejected this argument, requiring only payment of the fixed salary on a basis that complies with 29 C.F.R. § 541.602 (and of course qualifying exempt duties) for the exemption to apply, including most recently the Court of Appeals for the Third Circuit. Sander v. Light Action, Inc., 2013 U.S. App. LEXIS 8506 (3d Cir. Apr. 26, 2013).
The supplemental compensation at issue in Sander was not simple. Plaintiff worked for a production and lighting company. When she did not work off-site at a show, she received $1,153.85, regardless of her number of hours. When she worked a show, she received a pro-rated portion of her $1,153.85 salary (reflecting hours in the office), as well as hourly pay for off site hours at a higher rate (meaning she always received at least $1,153.85). As the Court put it, “the additional compensation she earned for working at shows was effectively calculated on an hourly basis, and she was paid that premium on top of her standard weekly salary. The multi-tiered nature of that scheme does not change the fact that Sander earned as part of her compensation package a predetermined amount ... [that was] not subject to reduction.” Id. at *10-11 (internal quotation omitted).
Employers within the Third Circuit will be gratified to learn that the seemingly generous act of paying additional compensation to salaried exempt employees does not jeopardize exempt status. Employers within the Third Circuit can hope that the Second Circuits adopts a similar approach, which is consistent with the governing DOL regulations. Anani v. CVS RX Servs., 788 F. Supp. 2d 55 (E.D.N.Y. 2011) on appeal at 2d. Cir. Docket No. 11-2359 (argued June 27, 2012).