Going from Exempt to NonExempt
carolynm_burgess
3 Posts
I have an employee that we are about to change from exempt to nonexempt. As our company has changed so has her position to a point where she does not make any independent decisions. Can anyone give me guidance as to what I need to watch out for in this change (she is very sensitive about her position - I don't want to end up in court). I would appreciate knowing how anyone else has handled this situation. Thanks.
Comments
In terms of the impact and possible problems, make sure that allo toehr positions that do the same job are treated int he same manner. If her duties have changed so that she would no longer be expt then other positions that do the same work need to be changed as well.
Make sure you wind up paying minimum wage rate.
And watch out for possible claims of sex or racial discrimination if other employees aren't switched (be prepared to show why such allegations aren't true).
And explain to the employee why the change is needed and the advantages over being exempt.
How would one go about changing from salary to hourly in a correct manner? Naturally, though we aren't doing this in this case, you would drop the pay rate to account for overtime. Does anyone have any suggestions?
As a nonexempt the advantage is the overtime when it happens. Where I am working...it seems the salaried employees are ofter on cell phones after hours with no increase in pay...and we have no perks except health insurance(and that is a good one)...but if you offer the exempt ee lots of perks that they would loose going down to the nonexempt class the hourly rate and the amount of overtime would have to compensate.
This is over the fact that going from exempt to nonexempt could be insulting to the ee.. and the employer is going to expect ee to continue to be responsible for their knowledge which ee may feel er doesnt deserve to get from a nonexempt.
I have spoken to an attorney about this matter and have been instructed that I need to change this position from exempt to nonexempt due to the fact that it doesn't make any decisions that allow it to be exempt.
The employee has taken it very badly - but there is no way around it in order to comply with FLSA.
I'd still go with what your attorney has said about changing her status. One thing you might want to be careful about. You might want to ascertain how long she has been misclassified and "make it right" by paying her any funds she might be entitled to in overtime. This could be a possible claim by her if she gets disgruntled to the point of quitting.
As others have said, the big advantage of being hourly is that you get paid overtime and that means you often make more money than you would have if you were exempt.
I'd not try to change her hourly rate. If she is full time, just divide out her annual rate by 2080 and don't try to figure out how much of her annual salary was contributable to overtime. This may keep her from being too upset. As with most things, employees tend to get over it after a week or so and may even see where it could be to their advantage.
Over all the process went very smooth.
Good luck,
Dutch2
Of course there may be some blow to the ego for an EE going exempt-->non-exempt... but I would think the extra earning opportunities would more than make up for that over time.
I'm not sure how it looks in others' shops... but I could give myself an instant 20% - 25% pay raise by re-classifying myself as non-exempt!
As others have pointed out, there's no legal liability in classifying someone NON-exempt: it's the "exempt" classification that's subject to question, scrutiny, and legal action.