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  1. #1
    Join Date
    Mar 2008
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    6

    Default Converting A Salaried Employee To Hourly

    Can an exempt ee who is currently salaried be converted to hourly? We would have to pay OT, right? Time and a half?

    Employee may be working some extremely "flexible" hours as well as using some vacation and some time unpaid over the next few months. Hourly is the only idea I had for making sure time was paid correctly.

  2. #2
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    16,926

    Default Re: New HR Generalist

    This really does not belong in the workers compensation forum. W/C refers to a type of insurance which provides payments and pays medical bills when an employee is injured on the job - it does not have anything to do with pay issues.

    However, to answer your question:

    Legally, any employee can be made non-exempt (the correct term for what you refer to as hourly). Microsoft can make Bill Gates non-exempt if they want to. Yes, you will have to pay overtime if the employee works over 40 hours in a week. However, a non-exempt employee has no legal expectation of being paid when they do not work.

    Only employees who qualify under Federal statute to be paid on an exempt basis (straight salary - no overtime) can be paid that way. An exempt employee is never entitled to overtime but they cannot have their pay docked except under very limited circumstances.

    EXEMPT EMPLOYEES ARE NOT PAID ON THE BASIS OF THE HOURS THEY WORK. AN EMPLOYEE WHO QUALIFIES AS EXEMPT GETS THEIR ENTIRE SALARY EVERY WEEK IN WHICH THEY WORK, REGARDLESS OF HOW MANY OR HOW FEW HOURS THEY WORK.

    However, except in California and even sometimes there, both exempt and non-exempt employees can have vacation, sick, personal or other paid leave applied to absences. (Non-exempt employees always can - limited exceptions exist, for exempt employees only, only in California.)

    Now that I've completely confused you, why don't you give me some more details of the situation and maybe I can help you sort it out.

  3. #3
    Join Date
    Mar 2008
    Posts
    6

    Default Re: New HR Generalist

    Here is the exact scenario and first, I apologize for posting on the wrong board, I did not see one specific to wages.

    We have a full time, salaried, exempt employee, who is a project manager in our engineering firm. He is planning on taking 4 weeks off starting next week. He does not want to use all of his vacation up (and we do not have a policy stating that he must) and he will also be working 10-20 hours a week while he is gone. He would like to combine some vacation, some work and some unpaid time for each of the 4 weeks he will be gone.
    He is planning another trip in August and again in December that will be shorter in length but about the same scenario.
    We are not in California.

    Thanks for your help. I have been on the DOL website but this does not seem to fit in to any of their FAQ's.

  4. #4
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    16,926

    Default Re: New HR Generalist

    I would strongly, in the most urgent possible terms, advise AGAINST changing him to non-exempt.

    Changing employees back and forth from exempt to non-exempt and back again, while not out and out illegal, gives the impression (whether correct or incorrect is immaterial - perception is everything in employment law) of trying to avoid certain provisions of the FLSA. A single, permanent change for a business-related reason can be justified; changing back and forth is the worst possible idea I can imagine.

    The fact that he does not want to use all his vacation is no reason he should not be required to. Nor does the fact that you do not have a policy saying that he must, mean that you cannot require it.

    Before I go any further, because it makes a difference what recommendation I make, will he be working a few hours a day, every day, or will he be working one or two days a week and taking the rest of the time off?

  5. #5
    Join Date
    Mar 2008
    Posts
    6

    Default Exempt Ee Paid Hourly?

    I posted this on the wrong board so if anyone recognizes it, I apologize for posting in multiple places!
    I am in Ohio and have a full time, professional, exempt employee. He is planning on taking some time "off" starting next week for 4 weeks. He will work minimal, roughly 20, hours during this time (hence the "off" part), use some vacation time and wants some of the time unpaid. He is not planning on exhausting his vacation accrual and we have no policy stating that he has to.
    My dilemma is this, if he is working/logging vacation and wants some unpaid time, I think it would be best to make him a non-exempt employee and pay him hourly. Other than having to then pay OT when he returns, should he work any, is there a legal downside to this? He is planning about 15 hours a week as unpaid.

    He is planning another trip in August and December so whatever I do now, will set the stage for the rest of the year.

    Thank you for your help!

  6. #6
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    16,926

    Default Re: Exempt Ee Paid Hourly?

    In your original thread I asked you a question. (Yes, there is very much a legal downside to your proposal.)

    If you will answer it, I can be of more assistance.

  7. #7
    Join Date
    Mar 2008
    Posts
    6

    Default Re: New HR Generalist

    I think if we make the change now, he will stay that way. I have an estimated work schedule for him and it shows 20, 12, 8 and 4 hours a week over the next 4 weeks. Not specifically what days.

    What is my other option? Leaving him salary and paying for the time he is gone on vacation? Even if he exhausts his vacation time, it comes no where near covering the 4 weeks and the way I understand it, if he works during the week at all, we have to pay the whole salary for the week, is that correct?

  8. #8
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    16,926

    Default Re: New HR Generalist

    That's why I was asking. But there are exceptions that might help you and I apologize for not asking you this before. What is the reason for his leave? It DOES make a difference to the answer.

    We'll get through this yet!

  9. #9
    Join Date
    Mar 2008
    Posts
    6

    Default Re: New HR Generalist

    Mainly vacation, he just bought a 2nd home in a resort area-may retire their eventually-but is taking some time to spend there.

  10. #10
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    16,926

    Default Re: New HR Generalist

    That being the case, it IS legal for you to not pay him at all for any day in which he does no work. You CAN require him to use vacation but if he runs out of vacation time and does NO work at all during the day, the day CAN be unpaid. There are exceptions to the law that says the employee must be paid his full salary if he works at all, and this is one of them. You do NOT have to pay him for any day that he takes off for personal reasons.

    What you need to get your mind around is that YOU, not the employee, are in control here. It IS your right to tell him that he MUST use vacation; it IS your right to tell him when (or whether) he can work. He doesn't get to set the rules so that it works out most favorable to him - you, the employer, get to set his hours of work. Exempt or not.

    You even get to tell him that he cannot take off four weeks at a time, paid or unpaid, now or in the future.

    If you have other project managers that are going to continue to be exempt, it is a very bad idea to change him to non-exempt so that he can spend large amounts of time at his vacation home. You're letting the tail wag the dog.

    Now, if he's the only project manager and you want to make it a non-exempt position on an on-going basis, that's up to you. But you need to look at how much the overtime is going to cost you as opposed to simply telling this guy that he doesn't get to set his own hours.

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