FLSA - changing employee status

Red

What is the best way to tell an employee that has always been on a salary that their job has been re-classified and they will now be considered non-exempt? (no actual pay change)We are changing customer service to non-exempt. Overtime is not an issue because they have never really worked any. I'm afraid they may take it as a demotion or a slap in the face. Any suggestions?

Margaret Morford

I would tell them that Wage and Hour and the courts are always reinterupting whether a job is exempt or nonexempt, that you are constantly watching their guidelines and the court decisions and that you re-adjust people's job status accordingly. Recently, you have come to believe that the current state of the law as interupted by Wage and Hour and the courts indicates that his/her job is now nonexempt. In accordance with this, you are changing his/her status. Because of this change in status, the Wage and Hour laws now require that he/she keep up with the number of hours worked per week and be paid accordingly. Also tell, him/her that if he/she works overtime, it will now be paid at 1 1/2 because you have reclassified him/her.

Hope this helps. If you have any questions, feel free to call me at 615-371-8200.

Margaret Morford

System

I assume you have carefully documented the change in duties that warrant changeexempt status to non-exempt. While, you can deem an exempt position as non-exempt, if you're CORRECTING the status to non-exempt because the original exempt status was wrong, you may be liable for retroactive overtime backpay up to two or three year period.

The employee probably will take it as a slap in the face, not because he considers it a demotion but because he is losing the "salaried" status and relative freedom of not having to account for time but justifying pay based upon degree of difficulty and "importance" of job. Now, absences will be accounted for and he will be called "hourly." There is no good way, except to emphasize the continued importance of his job and how much you rely on him, etc.