What is the effect of isolated or inadvertent improper deductions?
Improper deductions that are either isolated or inadvertent will not violate the salary basis rule for any employees whose pay had been subject to the improper deductions, provided that the employer reimburses the employees for the improper deductions. [Back to Top] What if the improper deductions are not isolated or inadvertent? If an employer has an actual practice of making improper deductions from employees’ pay (as opposed to isolated or inadvertent improper deductions), the salary basis rule will not be met during the time period in which the improper deductions were made for employees in the same job classification working for the same manager(s) responsible for the actual improper deductions. Therefore, the affected employees will not have been paid on a salary basis as required for exemption during that time period. [Back to Top] How do you distinguish between isolated or inadvertent improper deductions and an actual practice of making improper deductions? An actual practice o
