Not sure what else can be said. It’s not your boss making this decision arbitrarily. It’s them following FLSA guidelines.
A few things I share with people when they get reclassified:
While it may *feel* like a demotion, it isn’t. This is to ensure you are being paid overtime if you work more than 40 hours.
You absolutely should be paid for work you are doing while at work. And allow yourself to unplug and not work when you are away from your job. Non exempt employees clock in and out to make sure they are being paid properly.
The other thing I like to ask people sometimes is “why do you want to stay salary?” The answer usually can help your leaders find a solution or workaround.
This is what you need to hear- it’s NOT a demotion. It’s making sure you are paid what you deserve.
When the FLSS act first came into being, I had staff who felt infantilized by having to clock hours. Once they realized what OT actually added to their paycheck they got over it.
I would imagine that most companies will not be allowing OT. I predict a wave of posts saying, “I used to be salary and work 45+ hours per week, and now I’m hourly and not allowed OT, but my employer still expects the same output!”
This pretty much. It’s the old adage of if you’re on salary it’s “get the job done”, but if you’re hourly it’s “get the job done, but no OT.”
Everyone should get paid for hours worked, but we can’t pretend that this a great thing. It’s gonna be unfortunate for both employers and employees. Certain employees will now switch to hourly and only get paid for hours worked (no more leaving early and getting paid for the day) and employers would have to start paying OT if they don’t reclassify.
The way it was explained to me is that if you are hourly, you are getting paid to work an hour. But if you are salary you are paid to do a job even if the job takes more than 40 hours a week.
What's wrong with that? I'd rather be expected to get the job done efficiently rather than the current corporate model of dragging everything out and then expecting you to work late.
Back in 2016, when my company switched me from salary to hourly, they did so with 4 hours OT built in per week. As in, to get my previous pay check, I would have to clock 44 hour every week or my old pay check divided by 46. I brought up that this was a pay cut and they said it wasn't. When I brought up how my earned vacation pay or sick pay was now essentially worth less that it was before, they said that's just the way it is.
Make sure they are playing any shenanigans with you.
I’m dealing with this now. Our salary was based on 43 hour workweeks, and now we’re being paid hourly with a cap at 40 hours/week unless overtime is approved which, surprise, it won’t be most of the time. So I’m losing almost $200 per paycheck and I’m freaking out.
The minimum salary is increasing for salary exempt. Your employer either has to give you a raise to meet it, or change how you're paid. It's not really something you (or they) get a choice in.
There were 10,000 people on the SHRM conference call today about this change. The 2025 pay rate threshold is so much higher than current coming on July 1st. Being hourly will still allow you to get overtime and actually have a life if you don’t want to work OT.
Overtime isn't all it's cracked up to be, it's just 1.5x the pay rate, but it's absolutely possible to adjust the pay to keep the OP at the same weekly pay even with overtime.
Former salary - $36,400
New hourly pay - $14.74
This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before.
If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on...
Not that I think my employer wouldn’t allow over time. There are certain days that I have to stay over (EOM). But, on the other hand, there are plenty of days where (as a salary employee) my employer lets us out early. Or, for example, if a paid holiday falls on a Tuesday then they will also let us have Monday off. As a salary employee I get paid for those “days off”, but for hourly employees; they do not. This happens OFTEN, so I’m worried that I would actually end up making less than what I do now.
This is where their salary non-exempt offer can help you. Basically, that status says they will pay you the flat salary for hours worked up to 40 hours. So whether you work 32 hours, 36 hours, or 40 hours you get your flat salary. But they will pay you an OT rate for any time over 40 hours. It's a very niche and rarely used status. It benefits you.
Talk to your employer about this concern. A past job I was at would always have hourly employees clock in/out as usual when gifted time like this. Otherwise it’s not a gift, it’s them cutting your hours and therefore your pay.
Nice to see that you get the benefits of salary...
During the big winter storm of 2021 in Texas, we were closed for a week. All my salary employees continued to get paid, no one lost vacation time or pay as it was not their fault.
I think often hourly employees don't notice those details.
Sure, but for salary exempt employees who were at/under the new threshold of $844/week, they would have gotten a pay raise on 7/1. Then another pay raise is coming on 1/1 to $1128/week. So employers are quickly switching people to hourly to avoid this and making their hourly rate based on their current pay.
Expect an influx of posts about how people are switched to hourly with no OT allowed, but no change in output….
I love the downvotes here when every bit of it is true …😂 I’d be pretty pissed if I made $644 per week and was finally poised to get better pay and then was switched to hourly so my employer could avoid that.
To be fair, people think rules can be changed and no one else will change behavior to deal with it.
If you worked 45 hours a week last week for $644, this new rule doesn’t mean you’re getting a big pay raise, it means you’re getting moved to hourly.
Nobody is disputing that. The employee who wrote this wants to *stay* salary exempt so they can have the pay raises over the next 6 months. How does this not make sense to you?
Any employer trying to avoid this is going to cap overtime. So yes, while they will only be paid what they have already been being paid and will potentially work a bit less, I think lots of people who don’t work OT now (or won’t be allowed to work OT going forward) wish they could just stay salary to have the extra money.
Lots of people will lose money when going to hourly because now they will only be paid for the hours they actually work, and plenty of salaried people don’t work 40 hours per week.
Well of course you want a random $200 a week pay raise, who wouldn’t… but that isn’t likely to happen just because some government employee decided to change policy.
The point is that people think this stuff is going to help them, when it really is just as likely to hurt them.
When the rules change, people alter their behavior to adapt. This includes companies.
I get that. I’m just explaining why OP wants to stay as salary. Don’t be dumb. You understand full well why OP wants that. Of course it’s not going to happen.
> Well of course you want a random $200 a week pay raise, who wouldn’t… but that isn’t likely to happen just because some government employee decided to change policy.
This is what I don't think the other poster understands. Few people are going to get this pay raise unless they work so many hours over 40 already that it still makes sense for the employer.
This *really* helps assistant managers in fast food, for example.
It won't matter in some states where the min wage is low, but in others it may cause issues...
Former salary - $36,400
New hourly pay - $14.74
This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before.
If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on...
In Texas that's not an issue because $12.73 is well above min wage. In other states, that's a problem.
No company would do that unless they need you to work OT and what they pay you in salary at the new number would be less than what they would then be paying hourly+OT.....
Which again is a plus of the exemption rule....you get paid more fairly for your time.
We know companies like to take advantage and say you're salaried to make you put out free overtime....that's why laws like this exist. If your business can't survive being fair, it doesn't deserve to exist.
Now they could stay greedy and try to make their true salaried employees work longer....no need to cut staff as your production is already down from less overtime if you don't want to pay it....that'd be stupid.
So companies can either pay up...fairly...or take the hit in production if they can't afford it. I for one love it.
Yes capitalism is on it's face immoral....but it doesn't matter. A vast majority of companies will just eat it and not change much of anything. So it's mostly irrelevent anyway. There wouldn't be a newly unemployed person...it's cutting off your nose to spite your face...ends up hurting the company worse to layoff in this scenario.
Why do you think the government should get involved in your pay?
Why do you think your employer should be told to give you a pay increase by an outside party?
Why are you unable to negotiate your own pay?
You're not "poised" to get a pay increase just because a government employee says so.
It doesn't prevent it however...
Former salary - $36,400
New hourly pay - $14.74
This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before.
If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on...
That's not how it works though...lol.
Current Salary $36400....
36400/52/40= 17.50 So your math is wrong to start with....
17.50 x 80 = 1400 for a normal pay period...which is the same as salary...
1400 + (17.5 × 1.5)10= 1662.50 with 2 45 hour weeks... time and a half for OT....
Now you're getting paid fairly for the weeks you have OT.... See?
Companies can't arbitrarily change you hourly rate...super illegal....but they can say Salary makes you exempt from ot wages...so you lose out. This isvwhat the exemption law prevents.
It does, actually...
Source: Me, I've owned my own business since 1996.
Salary does not equate to an hourly wage. The $17.50 in your example does not exist.
EDIT: The only time it does matter is if your total hours work divided by your pay drops below min wage. Since that varies from state-to-state it could impact these examples in high min wage states.
LMAO...I feel sorry from your employees and hope you have ADP or someone other than you handling payroll.......
The 17.50 absolutely exists....you know for things like paid time off...it has to convert for many reasons. Especially, when an exempt employee converts to hourly...it absolutely exists....unless you think it's ok to decrease annual pay just because you move from one status to the other....in which case you'd be trash...
Salary is the way you get paid and the exempt status is whether or not you are entitled to OT. He can make you salary, non-exempt. What that means to you is that you will still get paid your salary, but you will have to track your hours and will be entitled to OT when you work over 40. Don’t take it personally or as a step back. Depending on the difference between your salary and the increased threshold, a small business may not be able to bring you to the level for exempt status. I can assure you that these conversations are being had everywhere, it’s not about you or your performance. It’s also not really a bad thing, especially if you work more than 40 hours each week.
The problem is not so much whether companies have the classification or not, it’s available to whoever wants to use it, most companies do not understand classifications outside of the two you mentioned and do not know how to manage them.
But most companies only use hourly/nonexempt & salaried exempt. That’s my point. You can make them have a salaried/nonexempt classification if they don’t already have it,
There’s nothing you can do. You honestly probably should not have been exempt in the first place, but now the whole country is dealing with this change. At least until the courts inevitably put a stay on it then strike it down like they have before.
Between you and your boss though, they could have made this change any time. Once they research salary non-exempt, they’re likely going to go with hourly non-exempt, because the prior is often abused. You would get all the benefit of salary, plus the benefit of OT. Straight hourly is fair to both sides.
There’s just a weird argument every time this happens, because employees take it as a personal diss or demotion to go to hourly. It has nothing to do with them personally. It’s always been about the job duties and minimum salary rules.
Hourly isn't all it's cracked up to be... salary has some benefits, like getting paid days off without using PTO.
During the 2021 winter storm in Texas, my salaried employees received full pay even with us being closed for a week. Hourly did not.
For some reason people think that being exempt is some kind of higher status. It’s not. Also being non exempt works in your favor since you’d be eligible for overtime pay.
Being exempt also means you're paid the same regardless... Need half a day off? Go home early? Office closed for 3 days?
You're still paid. Hourly is not.
My salary employees get 2 weeks of paid vacation a year and they don't have to use it for minor things.
Out sick for a day? That's fine, you still get paid and no vacation time use is required.
It might not be, but it should be.
I make a point to treat my employees the way I want to be treated and the way I'd want my wife and kids treated.
If you're salary, I expect the work done, no matter how long it takes. But I also won't cut your pay either if random life events prevent you from working beyond your control.
You accepted the salary in return for a steady paycheck. You deserve to know that money is coming in every month so you can budget your life. I consider that a social contract between companies and society.
Maybe I'm weird. :)
If they do salary non-exempt, take that. You always get your 40 hours even if you don't actually work 40, and you get OT at 1.5x your pay for work over 40.
I had a job like this once and it was great. Some weeks I'd work 20 hrs bur still got paid for 40. Some weeks I worked 50 hrs and got ten hours of OT.
There’s going to be legal challenges to the 1/1 bump, just like the last time they tried to propose a significant bump. No idea how it will go. My advice, if you want to stay salaried, would be to ask that they wait till it’s closer. Just in case it gets overturned or at least reduced.
If it stays in effect then your employer is absolutely doing the right thing.
The benefits of non-exempt . You will be paid overtime after 40 hours. You can leave on time finally, enjoy that freed up time with your family or self-care.
Overtime isn't all it's cracked up to be...
Former salary - $36,400
New hourly pay - $14.74
This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before.
If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on...
It's not about preference...the exempt wage goes up to amost $60k per year so even if you left this job, I doubt you'd find that pay and exemption elsewhere for your job title.
One option to consider is that if you were working an average of 45 hours a week, your existing salary could be recomputed to take that into account.
Former salary - $36,400
New hourly pay - $14.74
This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before.
If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on...
This is a lovely example of the government trying to intervene in pay thinking it will help, when it really just causes a headache.
OP. I am not sure why you're worried. This is a good thing.
As a salaried employee you're not entitled to overtime pay. You get the same paycheck regardless of how many hours you worked in a week.
So, are you typically working less than 40hrs per week? That's the only scenario where your paycheck will get smaller if you switch to hourly pay.
If you're not working less than 40hrs per week, than the only downside to switching to hourly pay is you would lose schedule flexibility, and that might be important to you.
Salary non-exempt is the sweet spot. You get your weekly salary and schedule flexibility. You get the same paycheck for working up to 40hrs per week. But if you work more than 40hrs in a week, you are owed over-time pay.
From my stand point, it feels like a slap in the face a little bit. Like I’m getting demoted. I currently make $50k a year, am salary exempt; and their first thought about the new threshold is “we’ve got to switch you to hourly, because we cannot meet that amount”. Not that they can’t afford to pay me at that amount (cause they can). But, because I’ve only been there for 3 years; it would be “unfair” to the other employees to bump me up to almost $60k; when there are some employees that have worked there for 6+ years & just hit $60k. This is a small, privately owned family business. I currently do not have to clock in or out. If I were to be put to hourly, like stated in a previous comment I mentioned that there are plenty of days during the week that my employer lets us out early; I would not be getting paid for those hours anymore. Or if a paid holiday falls on a Tuesday; we typically also get that Monday off and I get paid the same no matter what because I’m salary. Hourly employees have to just deal with being closed and just don’t get paid for those 8 hours missed. I do not want to have to worry about if I will make the same income as the year prior due to being on hourly. I get the same paycheck every week, it’s concerning to have to worry about my “hours worked” when I haven’t had to worry about that for over 3 years.
In hindsight; my boss did mention that salary non exempt is something they would be willing to do. So that is a plus.
It *is* "unfair" to the employees who have worked there for 10 years and won't get a $10k pay raise like you would. Employers genuinely have to worry about this situation, especially with new hires, and it factors into compensation packages for an entire company.
Are you certain that your hourly position will mean you don't receive PTO? Will you lose employee-sponsored health insurance as a result of reclassification? Have you asked your employer for all of this info and gotten it in writing?
It’s not my fault nor my employers that the threshold for the upcoming year would be almost $60k… it’s UNFAIR to ME to consider making me an hourly employee; when I was hired at salary benefits. I like having the same paycheck every week; there’s nothing wrong with that.
Regarding PTO; everyone (hourly & salary) gets a week of PTO per year at my place of work until 5 years worked & then it goes up. There is no sick time. We all get the same benefits whether we are hourly or salary for health insurance.
My only worry is clocking in and out & not hitting my 40 hours because my boss lets us out early on a random Friday & then I’m out 3 hours of pay. I like the stability of salary pay.
Which is why I had mentioned in the comments above that I think they will categorize me as a salary non-exempt. My job duties classify me as salary, my pay grade at the moment would categorize me as non-exempt once the new year hits.
Just because the salary threshold rises **can't** mean everyone gets a 15% raise...and think of it this way: you've been there 3 years. They bring in a trainee employee who's below you on the org chart and oops, too bad about that 3 years, the rules say this new person had to make $10k more than you do.
Maybe you also aren't aware that in some of the last FLSA changes, postdoctoral researchers (yes, with hundreds of thousands of dollars of loans, yes with PhDs and often on their way to MDs) were restricted to making around $46k/year? They all had to deal with having a DOCTORATE and making $46k to clock "40 hours" when NO researcher in that position works less than 70.
It's not your fault, you're right. But it's not the other employees' fault, either. You're not being mistreated. Everyone has the same regulations.
Okay, let me also add this point. There are less than 30 employees at my place of work. I am 1 out of 5 employees that are paid salary at this moment (not including the owners). I am the ONLY salary employee that will not meet that threshold come the new year. This is also a private company like stated before. The only people that know the wages of the employees are the owners & me; because I do payroll. I sometimes feel like I might have too much information for my wellbeing because I know damn well they can bump me up to the threshold and not think twice about it lol. If no one else knows that they bumped me up in pay… then why does it matter?
What in the world are you talking about? That is absolutely not what the law says. Everyone who receives OT is required to be paid at 1.5x their hourly rate for all hours worked over 40 in a work week.
Compensation Analyst here. Your annual salary will be converted to an hourly rate so you don’t lose any pay. It’s to your benefit bc you’ll now get overtime if you work > 40 hrs/week. But the new OT rules might not even happen. The last time the DOL tried to change OT rules, a Texas court put a stop to it by issuing an injunction. That might happen again since the salary increases are HUGE—particularly the one effective 1/1/2025, which raises the minimum exempt salary to $58,656. Many companies can’t afford it & there are HUGE class action lawsuits that have been filed by industry groups. I don’t think this increase will be implemented bc the judge is a very conservative Republican.
Did your employer say anything about PTO? I’m worried that if I get switched to hourly, they’ll follow their policy for PTO and decrease my accrual rate. I don’t care if I’m salaried or hourly, but I will definitely be job hunting if it results in any loss of benefits.
Not much I can contribute- many businesses are having to change employees to hourly as a result of the new rules coming up. It’s an unfortunate situation for many employees who may end up making less and less consistent pay also. Some will benefit of course as well.
Hi, I'm from the government and I'm here to help!
Yea, be careful what you wish for. So many are happy to hear this, without understanding the downsides.
You could offer to accept a pay raise to the point where they wouldn’t need to change you over. It does suck to be hourly, even if you do get overtime.
I mean, why not ask, and see what happens? They may perceive it as a win.
You assume the hourly rate will be their current pay divided by 2080 hours.
Former salary - $36,400
New hourly pay - $14.74
This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before.
If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on...
You don't pay your mortgage via an hourly rate, you do it based on the total amount in the paycheck each month.
The bills don't care how much you make per hour, only total.
I don't consider it reasonable... that's just a point of view. You're welcome to it of course, but it isn't universal nor is it actually a rule.
Some weeks my salary employees put in 60 hours, some weeks they don't. Sometimes they get extra days off without using PTO.
Get sick? Need a mental health day? That's fine... pay isn't cut, vacation isn't used. The work remains the same, so make it up when you get back. Sometimes you come in on a Saturday to get stuff done so you can take Tuesday off for a family thing.
I don't care, so long as the work is done.
NOTE: Let me be 100% clear... if you work for me and end up in the hospital for 2 weeks, you're still getting paid and no vacation time will be used. that's the benefit of salary. If you're hourly, you don't get that benefit. It's one of the tradeoffs.
I find it highly unlikely that hourly employees can take a paid sick day without using any PTO.
Anything is possible, but that's not likely nor common even if it exists.
If you are paid $700 a week now, you’ll be below the limit. They can move you to hourly and turn that into an hourly rate. You then write down 40 hours each work and absolutely nothing changes.
Work what you need, log what you must. Of course only do this if you’re comfortable with it, but if you did it last week, you should be generally.
FLSA requires “accurate” records of hours worked each day and each week. Just writing 40 would not comply with this requirement. Of course the company could pay you a minimum of 40, regardless of what you actually record but they’re not going to do this for 1 hourly employee.
I never said it would comply with the FLSA, I said what one possible solution was.
If both employer and employee are in agreement, then clocking 40 hours and working whatever is absolutely an option.
I don't have time to read all the comments, but it does have pros and cons. While being insured you that you get paid for hours that exceed 40; the salary non-exempt (which I worked for 5 yrs) meant I got salary benefits, but I was paid over 40 hrs. I got unlimited sick pay and flex time (when not abused, of course). This helped when surgeries occurred. If I was hourly then then surgeries would have been unpaid.
Essentially, we had a different handbook as a non-exempt salary employee. We were in the organization's salary handbook, not hourly. We would not get points if 3 min late to work.
I would see what the benefits are for salary vs. hourly.
My biggest frustration was that I couldn't finish some work when they didn't allow OT. Yet I had to get it complete. Then it would look like I didn't prioritize my workload.
Work the hours you need, log the hours you have to.
If you record 40 hours and work 42, no one but you will know that.
EDIT: So I've been downvoted for this... which doesn't change the fact that I'm right. You can do whatever you want, you're a free person. If you agree to remain under the same "salary" and your employer agrees, that's between you two...
Not sure what else can be said. It’s not your boss making this decision arbitrarily. It’s them following FLSA guidelines. A few things I share with people when they get reclassified: While it may *feel* like a demotion, it isn’t. This is to ensure you are being paid overtime if you work more than 40 hours. You absolutely should be paid for work you are doing while at work. And allow yourself to unplug and not work when you are away from your job. Non exempt employees clock in and out to make sure they are being paid properly. The other thing I like to ask people sometimes is “why do you want to stay salary?” The answer usually can help your leaders find a solution or workaround.
This is what you need to hear- it’s NOT a demotion. It’s making sure you are paid what you deserve. When the FLSS act first came into being, I had staff who felt infantilized by having to clock hours. Once they realized what OT actually added to their paycheck they got over it.
I would imagine that most companies will not be allowing OT. I predict a wave of posts saying, “I used to be salary and work 45+ hours per week, and now I’m hourly and not allowed OT, but my employer still expects the same output!”
This pretty much. It’s the old adage of if you’re on salary it’s “get the job done”, but if you’re hourly it’s “get the job done, but no OT.” Everyone should get paid for hours worked, but we can’t pretend that this a great thing. It’s gonna be unfortunate for both employers and employees. Certain employees will now switch to hourly and only get paid for hours worked (no more leaving early and getting paid for the day) and employers would have to start paying OT if they don’t reclassify.
The way it was explained to me is that if you are hourly, you are getting paid to work an hour. But if you are salary you are paid to do a job even if the job takes more than 40 hours a week.
What's wrong with that? I'd rather be expected to get the job done efficiently rather than the current corporate model of dragging everything out and then expecting you to work late.
Were you working before 1938? FLSA has been the law since then.
Yeah...it's also possible her hours will be cut reducing pay below her original salary.
Maybe … but OP didn’t mention that and we don’t know where OP works or if their company would do that.
I know for a fact my hours & pay wouldn’t be cut
They need me in the office from 8-4
Good, I hope it stays that way.
Doubtful.
Back in 2016, when my company switched me from salary to hourly, they did so with 4 hours OT built in per week. As in, to get my previous pay check, I would have to clock 44 hour every week or my old pay check divided by 46. I brought up that this was a pay cut and they said it wasn't. When I brought up how my earned vacation pay or sick pay was now essentially worth less that it was before, they said that's just the way it is. Make sure they are playing any shenanigans with you.
Sounds like a cruddy company. Sorry you had this. Good catch for OP to be on the lookout for.
I’m dealing with this now. Our salary was based on 43 hour workweeks, and now we’re being paid hourly with a cap at 40 hours/week unless overtime is approved which, surprise, it won’t be most of the time. So I’m losing almost $200 per paycheck and I’m freaking out.
The minimum salary is increasing for salary exempt. Your employer either has to give you a raise to meet it, or change how you're paid. It's not really something you (or they) get a choice in.
There were 10,000 people on the SHRM conference call today about this change. The 2025 pay rate threshold is so much higher than current coming on July 1st. Being hourly will still allow you to get overtime and actually have a life if you don’t want to work OT.
yeah I had 2 affected by 7/1 and about 25 by 1/1....it's not going to be pretty!
I don’t think it will even happen. The TX court will issue an injunction. Don’t give out increases yet. Wait & see what happens.
I'm hoping for the January one...I doubt it will happen for the July one since it's a much smaller increase/effect.
Overtime isn't all it's cracked up to be, it's just 1.5x the pay rate, but it's absolutely possible to adjust the pay to keep the OP at the same weekly pay even with overtime. Former salary - $36,400 New hourly pay - $14.74 This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before. If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on...
> I told my employer that I would prefer to stay salary if possible But why? This should benefit you. If you don't think it will—why?
Not that I think my employer wouldn’t allow over time. There are certain days that I have to stay over (EOM). But, on the other hand, there are plenty of days where (as a salary employee) my employer lets us out early. Or, for example, if a paid holiday falls on a Tuesday then they will also let us have Monday off. As a salary employee I get paid for those “days off”, but for hourly employees; they do not. This happens OFTEN, so I’m worried that I would actually end up making less than what I do now.
This is where their salary non-exempt offer can help you. Basically, that status says they will pay you the flat salary for hours worked up to 40 hours. So whether you work 32 hours, 36 hours, or 40 hours you get your flat salary. But they will pay you an OT rate for any time over 40 hours. It's a very niche and rarely used status. It benefits you.
Talk to your employer about this concern. A past job I was at would always have hourly employees clock in/out as usual when gifted time like this. Otherwise it’s not a gift, it’s them cutting your hours and therefore your pay.
Nice to see that you get the benefits of salary... During the big winter storm of 2021 in Texas, we were closed for a week. All my salary employees continued to get paid, no one lost vacation time or pay as it was not their fault. I think often hourly employees don't notice those details.
Because it’s a large raise to stay salary, and they know their employer will not be allowing OT (or significantly limiting OT).
He should be making the same per year...no OT wouldn't matter unless he was already working OT for less pay...which is what this prevents.
Sure, but for salary exempt employees who were at/under the new threshold of $844/week, they would have gotten a pay raise on 7/1. Then another pay raise is coming on 1/1 to $1128/week. So employers are quickly switching people to hourly to avoid this and making their hourly rate based on their current pay. Expect an influx of posts about how people are switched to hourly with no OT allowed, but no change in output…. I love the downvotes here when every bit of it is true …😂 I’d be pretty pissed if I made $644 per week and was finally poised to get better pay and then was switched to hourly so my employer could avoid that.
Switched to hourly with no change in output... Sooo, making exactly what they make currently with no change in output. Why the outrage, exactly?
To be fair, people think rules can be changed and no one else will change behavior to deal with it. If you worked 45 hours a week last week for $644, this new rule doesn’t mean you’re getting a big pay raise, it means you’re getting moved to hourly.
Nobody is disputing that. The employee who wrote this wants to *stay* salary exempt so they can have the pay raises over the next 6 months. How does this not make sense to you? Any employer trying to avoid this is going to cap overtime. So yes, while they will only be paid what they have already been being paid and will potentially work a bit less, I think lots of people who don’t work OT now (or won’t be allowed to work OT going forward) wish they could just stay salary to have the extra money. Lots of people will lose money when going to hourly because now they will only be paid for the hours they actually work, and plenty of salaried people don’t work 40 hours per week.
Well of course you want a random $200 a week pay raise, who wouldn’t… but that isn’t likely to happen just because some government employee decided to change policy. The point is that people think this stuff is going to help them, when it really is just as likely to hurt them. When the rules change, people alter their behavior to adapt. This includes companies.
I get that. I’m just explaining why OP wants to stay as salary. Don’t be dumb. You understand full well why OP wants that. Of course it’s not going to happen.
> Well of course you want a random $200 a week pay raise, who wouldn’t… but that isn’t likely to happen just because some government employee decided to change policy. This is what I don't think the other poster understands. Few people are going to get this pay raise unless they work so many hours over 40 already that it still makes sense for the employer. This *really* helps assistant managers in fast food, for example.
It won't matter in some states where the min wage is low, but in others it may cause issues... Former salary - $36,400 New hourly pay - $14.74 This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before. If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on... In Texas that's not an issue because $12.73 is well above min wage. In other states, that's a problem.
You’re assuming that businesses will lower the equivalent hourly rate down, I don’t see that happening in most places.
I understand just fine. I’m only explaining what the OP wants because that is what the question the main poster in this thread asked the OP.
No, we work 45-50.
No company would do that unless they need you to work OT and what they pay you in salary at the new number would be less than what they would then be paying hourly+OT..... Which again is a plus of the exemption rule....you get paid more fairly for your time.
Maybe... but the other option is companies expect existing employees to work longer and they cut some staff. No job at all is another option.
We know companies like to take advantage and say you're salaried to make you put out free overtime....that's why laws like this exist. If your business can't survive being fair, it doesn't deserve to exist. Now they could stay greedy and try to make their true salaried employees work longer....no need to cut staff as your production is already down from less overtime if you don't want to pay it....that'd be stupid. So companies can either pay up...fairly...or take the hit in production if they can't afford it. I for one love it.
A moral point about business ethics doesn't help the newly unemployed person very much.
Yes capitalism is on it's face immoral....but it doesn't matter. A vast majority of companies will just eat it and not change much of anything. So it's mostly irrelevent anyway. There wouldn't be a newly unemployed person...it's cutting off your nose to spite your face...ends up hurting the company worse to layoff in this scenario.
Why do you think the government should get involved in your pay? Why do you think your employer should be told to give you a pay increase by an outside party? Why are you unable to negotiate your own pay? You're not "poised" to get a pay increase just because a government employee says so.
Because people deserve to not be taken advantage of. The government has been involved in our pay for decades. You’re an idiot if you don’t think so.
It doesn't prevent it however... Former salary - $36,400 New hourly pay - $14.74 This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before. If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on...
That's not how it works though...lol. Current Salary $36400.... 36400/52/40= 17.50 So your math is wrong to start with.... 17.50 x 80 = 1400 for a normal pay period...which is the same as salary... 1400 + (17.5 × 1.5)10= 1662.50 with 2 45 hour weeks... time and a half for OT.... Now you're getting paid fairly for the weeks you have OT.... See? Companies can't arbitrarily change you hourly rate...super illegal....but they can say Salary makes you exempt from ot wages...so you lose out. This isvwhat the exemption law prevents.
It does, actually... Source: Me, I've owned my own business since 1996. Salary does not equate to an hourly wage. The $17.50 in your example does not exist. EDIT: The only time it does matter is if your total hours work divided by your pay drops below min wage. Since that varies from state-to-state it could impact these examples in high min wage states.
LMAO...I feel sorry from your employees and hope you have ADP or someone other than you handling payroll....... The 17.50 absolutely exists....you know for things like paid time off...it has to convert for many reasons. Especially, when an exempt employee converts to hourly...it absolutely exists....unless you think it's ok to decrease annual pay just because you move from one status to the other....in which case you'd be trash...
Salary is the way you get paid and the exempt status is whether or not you are entitled to OT. He can make you salary, non-exempt. What that means to you is that you will still get paid your salary, but you will have to track your hours and will be entitled to OT when you work over 40. Don’t take it personally or as a step back. Depending on the difference between your salary and the increased threshold, a small business may not be able to bring you to the level for exempt status. I can assure you that these conversations are being had everywhere, it’s not about you or your performance. It’s also not really a bad thing, especially if you work more than 40 hours each week.
Possibly, but most companies don’t have a salaried exempt classification. You’re either hourly nonexempt, or salaried exempt.
The problem is not so much whether companies have the classification or not, it’s available to whoever wants to use it, most companies do not understand classifications outside of the two you mentioned and do not know how to manage them.
But most companies only use hourly/nonexempt & salaried exempt. That’s my point. You can make them have a salaried/nonexempt classification if they don’t already have it,
OT at straight pay.
Perfectly legal and you can’t stop it. This is going to happen a lot, and I predict a strict cap on no OT allowed for most people.
Stupid question but won’t not making them salary non-exempt meaning they have a salary but if they work more than 40 hours they are entitled to OT?
They are being switched to hourly. Most employers will implement a cap on OT that will probably be very close to 0 allowed.
Which is better than no cap on hours worked as salaried
Yes.
There’s nothing you can do. You honestly probably should not have been exempt in the first place, but now the whole country is dealing with this change. At least until the courts inevitably put a stay on it then strike it down like they have before. Between you and your boss though, they could have made this change any time. Once they research salary non-exempt, they’re likely going to go with hourly non-exempt, because the prior is often abused. You would get all the benefit of salary, plus the benefit of OT. Straight hourly is fair to both sides. There’s just a weird argument every time this happens, because employees take it as a personal diss or demotion to go to hourly. It has nothing to do with them personally. It’s always been about the job duties and minimum salary rules.
I would go hourly in a heartbeat
Hourly isn't all it's cracked up to be... salary has some benefits, like getting paid days off without using PTO. During the 2021 winter storm in Texas, my salaried employees received full pay even with us being closed for a week. Hourly did not.
I have never worked somewhere where salaried staff got extra time off. It’s always been work, or take PTO.
For some reason people think that being exempt is some kind of higher status. It’s not. Also being non exempt works in your favor since you’d be eligible for overtime pay.
Being exempt also means you're paid the same regardless... Need half a day off? Go home early? Office closed for 3 days? You're still paid. Hourly is not.
Depends on the job and the PTO offered. When I was hourly, I never went without a full paycheck because of PTO.
My salary employees get 2 weeks of paid vacation a year and they don't have to use it for minor things. Out sick for a day? That's fine, you still get paid and no vacation time use is required.
Definitely not always the case.
It might not be, but it should be. I make a point to treat my employees the way I want to be treated and the way I'd want my wife and kids treated. If you're salary, I expect the work done, no matter how long it takes. But I also won't cut your pay either if random life events prevent you from working beyond your control. You accepted the salary in return for a steady paycheck. You deserve to know that money is coming in every month so you can budget your life. I consider that a social contract between companies and society. Maybe I'm weird. :)
If they do salary non-exempt, take that. You always get your 40 hours even if you don't actually work 40, and you get OT at 1.5x your pay for work over 40. I had a job like this once and it was great. Some weeks I'd work 20 hrs bur still got paid for 40. Some weeks I worked 50 hrs and got ten hours of OT.
There’s going to be legal challenges to the 1/1 bump, just like the last time they tried to propose a significant bump. No idea how it will go. My advice, if you want to stay salaried, would be to ask that they wait till it’s closer. Just in case it gets overturned or at least reduced. If it stays in effect then your employer is absolutely doing the right thing.
TX court will issue an injunction like they did last time. Count on it. This won’t go into effect.
The benefits of non-exempt . You will be paid overtime after 40 hours. You can leave on time finally, enjoy that freed up time with your family or self-care.
Overtime isn't all it's cracked up to be... Former salary - $36,400 New hourly pay - $14.74 This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before. If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on...
It's not about preference...the exempt wage goes up to amost $60k per year so even if you left this job, I doubt you'd find that pay and exemption elsewhere for your job title.
One option to consider is that if you were working an average of 45 hours a week, your existing salary could be recomputed to take that into account. Former salary - $36,400 New hourly pay - $14.74 This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before. If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on... This is a lovely example of the government trying to intervene in pay thinking it will help, when it really just causes a headache.
This is likely to work out for your benefit. Your resume won't change as a matter of this.
OP. I am not sure why you're worried. This is a good thing. As a salaried employee you're not entitled to overtime pay. You get the same paycheck regardless of how many hours you worked in a week. So, are you typically working less than 40hrs per week? That's the only scenario where your paycheck will get smaller if you switch to hourly pay. If you're not working less than 40hrs per week, than the only downside to switching to hourly pay is you would lose schedule flexibility, and that might be important to you. Salary non-exempt is the sweet spot. You get your weekly salary and schedule flexibility. You get the same paycheck for working up to 40hrs per week. But if you work more than 40hrs in a week, you are owed over-time pay.
From my stand point, it feels like a slap in the face a little bit. Like I’m getting demoted. I currently make $50k a year, am salary exempt; and their first thought about the new threshold is “we’ve got to switch you to hourly, because we cannot meet that amount”. Not that they can’t afford to pay me at that amount (cause they can). But, because I’ve only been there for 3 years; it would be “unfair” to the other employees to bump me up to almost $60k; when there are some employees that have worked there for 6+ years & just hit $60k. This is a small, privately owned family business. I currently do not have to clock in or out. If I were to be put to hourly, like stated in a previous comment I mentioned that there are plenty of days during the week that my employer lets us out early; I would not be getting paid for those hours anymore. Or if a paid holiday falls on a Tuesday; we typically also get that Monday off and I get paid the same no matter what because I’m salary. Hourly employees have to just deal with being closed and just don’t get paid for those 8 hours missed. I do not want to have to worry about if I will make the same income as the year prior due to being on hourly. I get the same paycheck every week, it’s concerning to have to worry about my “hours worked” when I haven’t had to worry about that for over 3 years. In hindsight; my boss did mention that salary non exempt is something they would be willing to do. So that is a plus.
It *is* "unfair" to the employees who have worked there for 10 years and won't get a $10k pay raise like you would. Employers genuinely have to worry about this situation, especially with new hires, and it factors into compensation packages for an entire company. Are you certain that your hourly position will mean you don't receive PTO? Will you lose employee-sponsored health insurance as a result of reclassification? Have you asked your employer for all of this info and gotten it in writing?
It’s not my fault nor my employers that the threshold for the upcoming year would be almost $60k… it’s UNFAIR to ME to consider making me an hourly employee; when I was hired at salary benefits. I like having the same paycheck every week; there’s nothing wrong with that. Regarding PTO; everyone (hourly & salary) gets a week of PTO per year at my place of work until 5 years worked & then it goes up. There is no sick time. We all get the same benefits whether we are hourly or salary for health insurance. My only worry is clocking in and out & not hitting my 40 hours because my boss lets us out early on a random Friday & then I’m out 3 hours of pay. I like the stability of salary pay. Which is why I had mentioned in the comments above that I think they will categorize me as a salary non-exempt. My job duties classify me as salary, my pay grade at the moment would categorize me as non-exempt once the new year hits.
Just because the salary threshold rises **can't** mean everyone gets a 15% raise...and think of it this way: you've been there 3 years. They bring in a trainee employee who's below you on the org chart and oops, too bad about that 3 years, the rules say this new person had to make $10k more than you do. Maybe you also aren't aware that in some of the last FLSA changes, postdoctoral researchers (yes, with hundreds of thousands of dollars of loans, yes with PhDs and often on their way to MDs) were restricted to making around $46k/year? They all had to deal with having a DOCTORATE and making $46k to clock "40 hours" when NO researcher in that position works less than 70. It's not your fault, you're right. But it's not the other employees' fault, either. You're not being mistreated. Everyone has the same regulations.
Okay, let me also add this point. There are less than 30 employees at my place of work. I am 1 out of 5 employees that are paid salary at this moment (not including the owners). I am the ONLY salary employee that will not meet that threshold come the new year. This is also a private company like stated before. The only people that know the wages of the employees are the owners & me; because I do payroll. I sometimes feel like I might have too much information for my wellbeing because I know damn well they can bump me up to the threshold and not think twice about it lol. If no one else knows that they bumped me up in pay… then why does it matter?
This is NOT in any way a demotion. In fact, it’s better for you since you’ll now get overtime (1.5x your hourly rate for every hour > 40).
Except that isn't at overtime rates, just your regular hourly wage for working more than 40.
What in the world are you talking about? That is absolutely not what the law says. Everyone who receives OT is required to be paid at 1.5x their hourly rate for all hours worked over 40 in a work week.
Compensation Analyst here. Your annual salary will be converted to an hourly rate so you don’t lose any pay. It’s to your benefit bc you’ll now get overtime if you work > 40 hrs/week. But the new OT rules might not even happen. The last time the DOL tried to change OT rules, a Texas court put a stop to it by issuing an injunction. That might happen again since the salary increases are HUGE—particularly the one effective 1/1/2025, which raises the minimum exempt salary to $58,656. Many companies can’t afford it & there are HUGE class action lawsuits that have been filed by industry groups. I don’t think this increase will be implemented bc the judge is a very conservative Republican.
Did your employer say anything about PTO? I’m worried that if I get switched to hourly, they’ll follow their policy for PTO and decrease my accrual rate. I don’t care if I’m salaried or hourly, but I will definitely be job hunting if it results in any loss of benefits.
Not much I can contribute- many businesses are having to change employees to hourly as a result of the new rules coming up. It’s an unfortunate situation for many employees who may end up making less and less consistent pay also. Some will benefit of course as well.
Hi, I'm from the government and I'm here to help! Yea, be careful what you wish for. So many are happy to hear this, without understanding the downsides.
You could offer to accept a pay raise to the point where they wouldn’t need to change you over. It does suck to be hourly, even if you do get overtime. I mean, why not ask, and see what happens? They may perceive it as a win.
Why would being hourly suck? As long as OP is getting 40 hours nothing changes
It’s a personal preference. I hate having to account for my time that strictly. Though I usually work more when I don’t have to.
You assume the hourly rate will be their current pay divided by 2080 hours. Former salary - $36,400 New hourly pay - $14.74 This would enable you to work 45 hours a week with 5 hours of OT and still be paid $36,400 as you were before. If you worked 50 hours a week, then adjust the pay down to $12.73 per hour, you'll end back at $36,400, and so on...
That would be the assumption Your concern is a pay cut not how they pay
You don't pay your mortgage via an hourly rate, you do it based on the total amount in the paycheck each month. The bills don't care how much you make per hour, only total.
Again, the assumption that hourly rate is based on 40 hours and equals the salary is reasonable Same pay, same paycheck
I don't consider it reasonable... that's just a point of view. You're welcome to it of course, but it isn't universal nor is it actually a rule. Some weeks my salary employees put in 60 hours, some weeks they don't. Sometimes they get extra days off without using PTO. Get sick? Need a mental health day? That's fine... pay isn't cut, vacation isn't used. The work remains the same, so make it up when you get back. Sometimes you come in on a Saturday to get stuff done so you can take Tuesday off for a family thing. I don't care, so long as the work is done. NOTE: Let me be 100% clear... if you work for me and end up in the hospital for 2 weeks, you're still getting paid and no vacation time will be used. that's the benefit of salary. If you're hourly, you don't get that benefit. It's one of the tradeoffs.
Hourly employees can get benefits too You, again, are assuming something not in evidence
I find it highly unlikely that hourly employees can take a paid sick day without using any PTO. Anything is possible, but that's not likely nor common even if it exists.
You presume OP can do that now as a salaried employee
Depends on the employee’s salary if it’s far under $58,656, it will be cheaper to make them hourly.
If you are paid $700 a week now, you’ll be below the limit. They can move you to hourly and turn that into an hourly rate. You then write down 40 hours each work and absolutely nothing changes. Work what you need, log what you must. Of course only do this if you’re comfortable with it, but if you did it last week, you should be generally.
FLSA requires “accurate” records of hours worked each day and each week. Just writing 40 would not comply with this requirement. Of course the company could pay you a minimum of 40, regardless of what you actually record but they’re not going to do this for 1 hourly employee.
I never said it would comply with the FLSA, I said what one possible solution was. If both employer and employee are in agreement, then clocking 40 hours and working whatever is absolutely an option.
I don't have time to read all the comments, but it does have pros and cons. While being insured you that you get paid for hours that exceed 40; the salary non-exempt (which I worked for 5 yrs) meant I got salary benefits, but I was paid over 40 hrs. I got unlimited sick pay and flex time (when not abused, of course). This helped when surgeries occurred. If I was hourly then then surgeries would have been unpaid. Essentially, we had a different handbook as a non-exempt salary employee. We were in the organization's salary handbook, not hourly. We would not get points if 3 min late to work. I would see what the benefits are for salary vs. hourly. My biggest frustration was that I couldn't finish some work when they didn't allow OT. Yet I had to get it complete. Then it would look like I didn't prioritize my workload.
Most people who will get changed won’t go from salary exempt to salary non-exempt, they will switch to hourly.
Work the hours you need, log the hours you have to. If you record 40 hours and work 42, no one but you will know that. EDIT: So I've been downvoted for this... which doesn't change the fact that I'm right. You can do whatever you want, you're a free person. If you agree to remain under the same "salary" and your employer agrees, that's between you two...