Changing an Exempt Status to a non-exempt

Sandcoral

If I do not want to have to pay overtime for hourly employees, can I change their status to Exempt?

Hatchetman

FLSA sets "default" status as non-exempt, hourly...which means time and a half for overtime (above 40 hours per work week). An employer may determine that a position is exempt from the overtime requirements (and from minimum wage requirements) if the position is salaried (as differentiated from waged or hourly) and performs duties falling into one of three basic "white colloar exmeptions ("executive", professional, and administrative); or one of the specialized ones. There's more to it. If you want to check out more specificlaly on what you need to establiswh to say that these employees are non-exempt, go to the US Department of Labor's website, [url]www.dol.gov[/url]. and use their "elaws" advisor interactive tool. It will guide you through and give you some basic explanations and requirements.

But in short, you can't just deem the employees exempt and not pay overtime. You must justify it. And changing from non-exempt to exempt shouldn't be done routinely to avoid paying overtime even if the employees could be exempt but have been allowed to be "non-exempt" by the employer.

And then even if you find that the emplyees could be exempt under FLSA, you should also check your state law. That may set a higher "bar" to establish exempt status. FLSA sees the non-exempt status as beneficial to the employee and therefore permits either state or federal law to be used on the basis that one or the other is more beneficial to the employee.

Theresa Gegen TX

Hatchetman's concerns are right on. The Fair Labor Standards act is very employee friendly. I suggest you get legal advice about the specific positions you want to change from hourly to salaried. If your company makes a mistake, it would be very costly.