Salary Basis Test is a legal test used to determine whether a job can be classified as hourly or salaried based on criteria such as the pay rate for the job, the method of calculating wages, and the level of job supervision.

Example

A company has to conduct a Salary Basis Test to ensure that salaried jobs are paid according to legal requirements. As a result, the company can improve its wage calculation method, increase pay for highly skilled jobs, and provide appropriate allowances for jobs that require overtime.