Can salary "exempt" employees be switched to hourly employees legally but still do the same "exempt" job?
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Can salary "exempt" employees be switched to hourly employees legally but still do the same "exempt" job?
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I have been asked to switch all our employees to hourly by our company President. We have many that are now classified as exempt because they meet the tests to be in the exempt class. Obviously they are all paid a weekly salary. About half of them work on average 50hrs/wk and the others only work about 4days or 35 to 45 hrs/wk. The purpose of the President in doing this is to make it fair to the Salary employees putting in 50+ hrs a week and to save $. He wants to switch the salary employees to hourly and base the hourly pay on a 50 hr week. My biggest concern is the basing the hrly rate on 50 hrs. He first wanted to reduce salaries by one fifth (one day) first but decided against that. Instead he wants to do this salary to hourly switch. I want to do whatever is legal because I am the one that will have to fix it again if it is done wrong- the President won't have to deal with any possible headaches.
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KP7689
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Changing anyone from exempt to non-exempt is not an issue. Classifying employees who should be hourly as salaried is a violation, but you are safe and legal moving them to non-exempt.
Your boss is essentially still giving them a 20% pay cut by basing on 50 hours a week, but again this is legal.
As long as you are paying all non-exempts overtime for hours over 40, your're fine. |
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Tim M
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I agree with sumbumblebee. I'm not an HR person, but I've seen this done, and although your boss might want a 50-hr week, by law he has to pay time-and-a-half for anything over 40 hours. That is one of the main reasons for having "exempt" employees, so he might want to rethink his plan. |
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Oldwhiteguy2earth
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What state are you in? Non-exempt employees in most states have to be paid overtime for any work in excess of 40 in a week. California employees have to also be paid overtime for time worked in excess of 8 in a day. |
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sumbumblebee
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If it states in their contract that they are exempt or non-exempt, then you'll need to change their employment contracts, but, otherwise, there is no law against switching from one form of salary to another. But you will have to pay those who work overtime time and a half if they work over 40 hours, which you don't have to do if they're exempt. But you also won't have to pay those 35 hour workers for the extra 5 hours that they didn't work.
Good luck. :0) |
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