Change In Exempt Status/Overtime?
Sunny
259 Posts
I could really use your collective wisdom on this one and I apologize in advance for its length.
In March of 2000 we purchased a plant. We retained the plant's chief maintenance worker and promoted him to second-shift supervisor with responsibility over maintenance as well. This was clearly an exempt position and we treated it as such. Under our policy, we pay our exempt plant supervisors straight-time overtime for hours worked over 44 in a week.
So far so good. Fast forward to December of 2002. We merged this facility with another plant we closed. We also lost, through military leave, our maintenance worker. Now, we have moved another supervisor onto the second shift and are using the original maintenance worker as, well, as a maintenance worker. He also fills in for the second shift supervisor on occasion.
Clearly, this is no longer an exempt position. However, since we are paying him straight time o/t I was asked if we couldn't treat him as "salaried non-exempt" and pay him as we are now, except for paying straight time over 40 instead of 44. This would seem to be in line with what the DOL had us do when they decided one of our engineers was not exempt since he had only a 2-year degree. They calculated his hourly rate and told us we owed him half-time for the o/t hours since we had already paid him straight time for all hours worked.
The problem we have is that to make things right with the employee (who we really don't want to lose) we would have to make his hourly rate very high and start docking him for sick days, etc. It is felt to be a better solution (and more satisfying to the employee) to leave things more or less as they are, if we can without being in violation of the FLSA.
I would really appreciate your thoughts on this.
In March of 2000 we purchased a plant. We retained the plant's chief maintenance worker and promoted him to second-shift supervisor with responsibility over maintenance as well. This was clearly an exempt position and we treated it as such. Under our policy, we pay our exempt plant supervisors straight-time overtime for hours worked over 44 in a week.
So far so good. Fast forward to December of 2002. We merged this facility with another plant we closed. We also lost, through military leave, our maintenance worker. Now, we have moved another supervisor onto the second shift and are using the original maintenance worker as, well, as a maintenance worker. He also fills in for the second shift supervisor on occasion.
Clearly, this is no longer an exempt position. However, since we are paying him straight time o/t I was asked if we couldn't treat him as "salaried non-exempt" and pay him as we are now, except for paying straight time over 40 instead of 44. This would seem to be in line with what the DOL had us do when they decided one of our engineers was not exempt since he had only a 2-year degree. They calculated his hourly rate and told us we owed him half-time for the o/t hours since we had already paid him straight time for all hours worked.
The problem we have is that to make things right with the employee (who we really don't want to lose) we would have to make his hourly rate very high and start docking him for sick days, etc. It is felt to be a better solution (and more satisfying to the employee) to leave things more or less as they are, if we can without being in violation of the FLSA.
I would really appreciate your thoughts on this.
Comments
Then make him exempt, which it sounds like he is, and adjust his salary to that number.
He gets the overtime you want to pay him, your not making him hourly, and he should be happy getting the overtime -- more or less in advance.
DA ! DA !
What has changed in the duties that renders the position no longer exempt (assuming the original exempt "call" was correct)?
By the way, there is salaried non-exempt provided for in FLSA regulations. If th eemplyee receives a salary based upon a fixed number of hours worked, in order to compute the hourly rate for overtime purposes (if the employee works more than 40 hours per week), the weekly salary is divided by the number of hours that salary is suppose to cover during the week, which may not necessarly be 40. When the employee works more than 40 hours a week, then that hourly rate is multiplied by 1.5.
If the salary is paid when a non-exmept employee works fluctuating hours from week to week, you would still pay the set salary, regardless of the number of hours, the employee worked, but would only need to pay .5 on the overtime hours. To determine the hourly rate for the work week, the number of hours the emplyee worked including the overtime is divided into the salary.
But remember if you put a non-exempt employee on a salary, you then need to pay that salary no matter how many days or hours the employee works (other then when overtime occurs). There is no docking pay for absences as there would be for exempts as permitted by FLSA.
But again, please explain why you think the status of the second shift supervisor has changed.
Thanks so much - that's exactly what the Ops. Director wants to do and your explanation was clear and succinct. He is non-exempt now because he is performing maintenance duties not supervisory duties. And yes, the purpose of this is to continue treating him as a "salaried" employee - that is not to dock him for any absences or remove any "privileges" he received as a salaried exempt.
Thanks everyone for your help.
Of course, you can keep it simple and always calculate using the higher amount for his hourly rate ($10 per hour if $400 pays for 40 hours.) If you always pay the $5.00 for the overtime, you wouldn't have to calculate rate for each payperiod.
Confusing, but I hope this helps. Tks, Barbara