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Can An Employer Convert a Salaried Employee to an Hourly Status to Address an Attendance Problem?

June 28, 2023

Laura L. Rubenstein

Imagine you have a professional working at your company who barely rolls into work at 10 and religiously leaves by 3. The work is piling up, customers are starting to complain, and professional colleagues who witness the behavior are becoming resentful. Human Resources has reminded the person about the hours expectations, they’ve been counseled them in writing, and you’re looking for the next step. Worse yet, the employee is an exempt employee and paid a salary so you can’t deduct their weekly wage, even though they’re working 3 hours a day less than their peers.

The next step… convert them to an hourly, exempt employee. Even when a position qualifies for exempt status, an employer may prospectively change the status to nonexempt to help cure an attendance problem. However, as with all nonexempt positions, the employer will need to track the hours worked and pay overtime as appropriate.

The U.S. Department of Labor supports this tactic and has opined that classifying one position as nonexempt does not affect the exempt status of other positions with the same job title, as long as those similar exempt positions actually meet the criteria for exemption.

Be warned that changing the classification of an employee from exempt must be done with the intention of the change being long term or permanent. A week-by-week change or frequent changes back and forth from exempt to nonexempt status may indicate the employer is trying to avoid overtime pay.  

For guidance on addressing workplace issues with your employees, contact your friendly, helpful, and experienced employment counsel at RKW Law Group.

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