(a) An employer may provide an exempt employee with additional compensation without losing the exemption or violating the salary basis requirement, if the employment arrangement also includes a guarantee of at least the minimum weekly-required amount paid on a salary basis. Thus, for example, an exempt employee guaranteed at least $684 each week paid on a salary basis may also receive additional compensation of a one percent commission on sales. An exempt employee also may receive a percentage of the sales or profits of the employer if the employment arrangement also includes a guarantee of at least $684 each week paid on a salary basis. Similarly, the exemption is not lost if an exempt employee who is guaranteed at least $684 each week paid on a salary basis also receives additional compensation based on hours worked for work beyond the normal workweek. Such additional compensation may be paid on any basis (e.g., flat sum, bonus payment, straight-time hourly amount, time and one-half or any other basis), and may include paid time off.
(b) An exempt employee's earnings may be computed on an hourly, a daily or a shift basis, without losing the exemption or violating the salary basis requirement, if the employment arrangement also includes a guarantee of at least the minimum weekly required amount paid on a salary basis regardless of the number of hours, days or shifts worked, and a reasonable relationship exists between the guaranteed amount and the amount actually earned. The reasonable relationship test will be met if the weekly guarantee is roughly equivalent to the employee's usual earnings at the assigned hourly, daily or shift rate for the employee's normal scheduled workweek. Thus, for example, an exempt employee guaranteed compensation of at least $725 for any week in which the employee performs any work, and who normally works four or five shifts each week, may be paid $210 per shift without violating the $684-per-week salary basis requirement. The reasonable relationship requirement applies only if the employee's pay is computed on an hourly, daily or shift basis. It does not apply, for example, to an exempt store manager paid a guaranteed salary per week that exceeds the current salary level who also receives a commission of one-half percent of all sales in the store or five percent of the store's profits, which in some weeks may total as much as, or even more than, the guaranteed salary.
[84 FR 51307, Sept. 27, 2019, as amended by 89 FR 32972, Apr. 26, 2024; 91 FR 27836, May 15, 2026]
Notes of Decisions
Gentry v. Hamilton-Ryker IT Solutions, 102 F.4th 712 (5th Cir. 2024).
· cites it 14× “604(a) (“§ 602(a)” and “§ 604(a)”); or through the alternative route established by 29 C.F.R. § 541.604 (b) (“§ 604(b)”). The issue today is which regulation applies.”
Rindfleisch v. Gentiva Health Servs., Inc., 24 F. Supp. 3d 1234 (N.D. Ga. 2013).
· cites it 20× “634, 30], In its motion, Gentiva requests that this Court certify for interlocutory appeal the issue of whether the non-visit fees under the PPV Plan constitute an extra payment under either subsection (a) or (b) of 29 C.F.R. § 541.604 [id. at 8-10]. 3 Additionally, Gentiva’s…”
Anani v. Cvs Rx Servs., Inc., 788 F. Supp. 2d 55 (E.D.N.Y 2011).
· cites it 9× “In addition to the general criteria for determining whether an employee is paid on a “salary basis” in section 602, an employer may provide additional compensation that is paid on a non-salary basis without violating the salary basis test, subject to the provisions of 29 C.F.R.…”
Jeff Faludi v. U.S. Shale Solutions, L.L.C., 936 F.3d 215 (5th Cir. 2019).
· cites it 7× “Finally, Faludi suggests that the requirements in 29 C.F.R. § 541.604 (b) prevented him from qualifying as a highly compensated employee.”
Lynwood Pickens v. Hamilton-Ryker IT Solutions, 133 F.4th 575 (6th Cir. 2025).
· cites it 9× “” 29 C.F.R. § 541.604 (b). As Helix tells us, courts may not forgo that requirement merely on the ground that the employee has an irregular work schedule.”
Rindfleisch v. Gentiva Health Servs., Inc., 962 F. Supp. 2d 1310 (N.D. Ga. 2013).
· cites it 11× “605 and 29 C.F.R. § 541.604 . As the parties have submitted sufficient briefing regarding the interpretation of these two regulations, the Court believes oral argument is unnecessary.”
Hughes v. Gulf Interstate Field Servs., Inc., 878 F.3d 183 (6th Cir. 2017).
· cites it 2× “29 C.F.R. § 541.604 (b). This language, Hughes and McDonald point out, retains the key phrase “employment arrangement,” redolent of the bygone textual reference to an “employment agreement,” the newfound absence of which we found telling in Orton and Baden-Winterwood.”
Helix Energy Solutions Grp., Inc. v. Hewitt, 598 U.S. 39 (2023).
“601 remains subject to the detailed requirements of 29 C.F.R. § 541.604 when deter- mining whether highly compensated supervisors are exempt from the [Fair Labor Standards Act]'s overtime-pay require- ments.”
Anani v. CVS RX Servs., Inc., 730 F.3d 146 (2d Cir. 2013).
· cites it 2× “29 C.F.R. § 541.604 (b). Appellant’s argument is based on Subsection 604(b)’s condition that “a reasonable relationship exist[ ] between the guaranteed amount and the amount actually earned” and “the weekly guarantee is roughly equivalent to the employee’s usual earnings.”
Rodriguez v. City of Corpus Christi, 129 F.4th 890 (5th Cir. 2025).
· cites it 2× “” 29 C.F.R. § 541.604 (a). In addition to her guaranteed salary, the City chose to voluntarily pay Rodriguez overtime for a limited time.”
Hewitt v. Helix Engy Solutions Grp, 15 F.4th 289 (5th Cir. 2021).
“” That regulation is found in 29 C.F.R. § 541.604 (b). And it explicitly states that an employee whose pay is “computed on a daily basis” must meet certain criteria to satisfy the salary-basis test: An exempt employee’s earnings may be computed on an hourly, a daily or a shift…”
— 29 C.F.R. § 541.604(a) — 5 cases
— 29 C.F.R. § 541.604(b) — 1 case
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