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Salary reductions and exempt status

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Q. We are considering reducing salaries across the board because of a slowdown in business. Will reducing the salary of exempt employees jeopardize their exempt status?

A. You can prospectively reduce salary for future workweeks, without jeopardizing exempt status, but not below the minimum ($455 per week, in general). However, do not take this too far. If you adjust the salary too often based on expected workload, there is a danger that the salary will be treated as the equivalent of an hourly rate, which would jeopardize exempt status.

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