Exempt/Non Exempt

JF12

I was wondering if there is a problem if I need to change an exempt salary employee to a non-exempt employee hourly employee because of the new overtime regulations? Can I keep the employee salary and pay them overtime or just switch them to hourly at the same rate that they were making on salary?

Don D

Your question seems to be "Can I keep paying them the same thing and then just pay overtime when it's due?" I believe that's what the law intends, and the result would be, it seems, that you've properly recognized them as non-exempt, since you would now pay them overtime. Sometimes we tend to confuse the words salaried and exempt. There are plenty of salaried, non-exempt positions out there. But, the only way you can treat your employee properly is to track hours and pay the overtime he/she is due. Be aware that some states require that employees be paid at a certain frequency if they are non-exempt, so that may mean changing your payment schedule.

hhaynal

Keep in mind that if this person you are changing from exempt to non-exempt worked overtime during the last two years, you will need to assess that amount and pay the employee accordingly. Can be a daunting process unless the employee kept a calendar noting "extra hours at the office".

SMace

Why do you have to go back 2 years? I would think that if the change was a result of the new regs, you would have to go back to when the new regs went into effect. What am I missing?

hhaynal

[font size="1" color="#FF0000"]LAST EDITED ON 12-16-04 AT 12:42PM (CST)[/font][br][br]I am looking up the section re misclassification of status and will get back to you with it.

We are currently in the process of reclassifying exempts who should have been non-exempts years ago, not just as a result of the new regs. As a result, under the regs we were required to go back two years and pay overtime hours to the affected employees.