Changing from Salary to Hourly

WITracy

Like many businesses these days, our company is struggling financially & is being forced make changes in business operations. The owner believes that making all employees hourly is one way to save money. He sees several of our exempt employees not working 40 hours per week (because business is so slow) & thinks that if they're made hourly he'll either save on payroll or they'll work their 40 hours like they are suppose to.

I believe that all of our employees are classified correctly & I am very leary about changing any status for this particular reason. I see this as a performance issue that should be addressed individually with the employee(s) of concern. I've brought up the fact that at some point (hopefully) we'll be busy again & then what? We certainly can't change people's status back & forth to suite our financial needs.

I'm trying to be open minded & look at this from all sides. Is this a reasonable option? Does anyone out there currently operate like this? Other thoughts?

Thanks.

Gillian

No, it is not a reasonable option. Whether or not a person is exempt or non-exempt depends on the duties of the job. If the boss changes the employees to hourly and by doing so loses the overtime exemption, what will he or she do when one the employees files a wage claim for all of the overtime that was worked when business was good?

Lola815

Don't make that change. If your boss is worried about people not working their 40 hours as salaried, making them hourly is not going to help the situation. You will just have people clocking in and not working and having to pay them for goofing off.

Try to give your boss some other options such as, have everyone work shorter hours (35 hours a week) and give everyone a pay cut.

Don D

[font size="1" color="#FF0000"]LAST EDITED ON 08-20-02 AT 04:19PM (CST)[/font][p]Gillian and Lola are right on point. I'm afraid what you have is the classic upper management guy who is in dire need of a 5 year educational process in a 30 minute time period. In crises, HR is often expected to funnel a ton of labor law information down the ear of a manager who never gave a rats about the information prior to that minute. Nature of the beast, huh? Good luck! x:-)