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This page was formerly named ERD-13109-P (Revised: 10/2014)
"Salary" is a regularly paid amount of money, constituting all or part of an employee's wages, paid on a weekly or less frequent basis, that is not subject to reduction due to the quality or quantity of work performed. This is the general definition in federal law (29 CFR § 541.602). Since Wisconsin's, overtime law does not define "salary," and since Wisconsin's overtime exemptions are interpreted in a manner consistent with federal interpretation, this is the applicable definition.
Anyone can be paid on any basis – salary, hourly, commission, piece-rate, flat rate – as long as they receive minimum wage for all hours worked in the pay period, and as long as overtime is paid when required. Overtime is usually required at time and one-half the regular rate of pay for hours worked in excess of 40 in a week. There is a provision in the overtime regulations (Chapter DWD 274, Wisconsin Administrative Code) that "exempts" your position from overtime requirements if your work's primary duty is administrative, executive, or professional. One of the requirements for each of these exemptions is that you are paid on a salary basis. Not all salaried employees are "exempt," though. You must meet the definitions in the law in order to be classified as exempt. For more information on these definitions, see "Wisconsin Hours of Work and Overtime Law," part of the Labor Standards Information Series.
No. Employers have the right to schedule you as they feel is necessary. If you are not exempt, overtime must be paid for hours worked in excess of 40 in a week. If you work in a factory or mercantile establishment, you must receive at least 24 hours of rest in each calendar week, under Wis. Stat. § 103.85. Employers can require that you work extra hours as they wish.
This depends upon the wage agreement between you and the employer. If you are exempt as an executive, administrative employee, or professional, generally no additional pay would be owed unless there is some agreement for additional pay. If you are a non-exempt employee, your employer must pay overtime if you work more than 40 hours in a week. Your employer may have to pay additional amounts if it is specified in the agreement that the salary is meant to compensate for up to 45 hours. Contact the Equal Rights Division for additional information regarding this type of situation.
Overtime must be paid at time and one-half the regular rate of pay. The "regular rate" is an hourly rate that will change if you are a salaried employee based upon the number of hours worked in a week. Since salary constitutes wages at straight time for all hours worked, you employer owes an additional half time for the hours in excess of 40 in a week.
Example: You are a non-exempt employee who is paid a salary of $500 per week, and you work 50 hours in a given week. Since the agreement is just that you will be paid a $500 salary, that sum would cover any number of hours worked. The regular rate for this week is the salary ($500) divided by the 50 hours worked, or $10.00. To pay overtime, your employer needs to divide the regular rate in half ($10.00 divided by 2, or $5.00), and then multiply that result by the 10 overtime hours. The overtime due for this week is $50. Your gross wages for the week, including overtime, would be $550 (the $500 salary plus $50 in overtime pay).
Wisconsin law allows this method of overtime compensation for salaried, non-exempt employees, but federal law may not. Contact the federal Wage and Hour Division at (608) 441-5221 for further information.
Generally, no. Deductions may not be made for partial days of absence, except in the case of authorized use of leave under the federal Family and Medical Leave Act.
Yes, but only if the deduction is made in conjunction with a bona fide sick pay policy that provides payment for absences that occur because of illness or accident. If your employer has a sick pay policy, but you are not eligible for benefits under the policy for the first 90 days of employment, your employer may deduct for full days of absence due to illness during that first 90-day period. If the policy offers five sick days per year and you used those days, deductions may be made for full days of absence due to illness after the sick pay has been used.
If work is not made available to you, and you are paid on a salary basis for part of a workweek, your employer may not reduce the week's salary. If work is not made available to you for an entire workweek, however, no salary needs to be paid.
Your employer may not deduct from your salary for absences that take place because of jury duty, attendance as a witness, or temporary military leave. Your employer may, however, offset the salary by amounts your received by the employee as jury or witness fees, or as military pay. It is important to note that your employer does not have to pay any salary if you did not work at all in a workweek for any of these reasons.
Yes. Salary may be prorated for actual time worked in both the initial and terminal weeks of employment.
No. Employers are not obligated to make benefit payments beyond the regular salary just because they do so for hourly paid personnel. If they have agreed to do so, however, they must pay according to the agreement.
Yes. Your employer can require that you use leave time to make up missed days, as long as the leave time is sufficient to replace what would otherwise be lost salary. This does not constitute a deduction of the salary for the week if the amount paid is the same.
The answer is yes, but "prorate" is not the way to refer to this change. Your employer may change your salary in a situation like this. Caution is advised, because changing the salary each week might be seen as payment of hourly wages rather than meeting the definition of salary basis.
Yes, but be careful. Your employer may change the method of payment when it wishes, as long as they inform you prior to the performance of the work. If you are non-exempt, and your employer always pays overtime, this causes no particular problem. If you are an exempt employee, there may be a problem, however. Repeated changes made simply to reduce overall wages and to avoid the payment of overtime may be viewed as not in keeping with "salary basis," and the exemption may be lost. Be careful about making frequent changes.
Employers in the State of Wisconsin must keep time and payroll records for most employees. The required records must include the time in and the time out on a daily basis, the total number of hours worked per day and per week, and the time in and out for meal periods if that time is deducted from hours worked. Meal periods may be deducted from hours worked if they are at least 30 consecutive minutes in duration, and if the employee is relieved of duty and free to leave the premises during the break. Note: Wisconsin law does not require meal periods or rest periods for adult employees. Minors may not work more than 6 consecutive hours without receiving a meal period of 30 consecutive minutes.
Employers are not required to keep time/payroll records for employees who are exempt from overtime requirements and paid on other than an hourly basis. Salaried employees may be exempt if they meet the salary basis test and a duties test for exempt administrative, executive, and/or professional employees.
DWD Contact Information
201 E. Washington Ave
P.O. Box 7946
Madison, WI 53707
(608) 266-3131
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