Question:
Answer: Celine, SHRM-CP, one of our HR Pros says…
You are correct that since this manager no longer meets the minimum salary requirement to qualify as exempt, she needs to be reclassified as non-exempt. However, you still have an option of classifying her as hourly non-exempt or salaried non-exempt. This is because an employee’s exemption status refers to whether or not they are entitled to overtime under the Fair Labor Standards Act while being “hourly” or “salaried” simply refers to the method by which you calculate their weekly pay.
The most common option and the one we recommend in almost all cases is hourly non-exempt, where she would be paid for exactly the number of hours she works each week, whether that’s 15.5, 20, or 28.25. If you choose to make her salaried non-exempt, you will agree to pay her the same amount for each week when she performs 40 hours or fewer of work.
Regardless of how pay is issued, she must be paid time and a half for hours worked over 40 in a workweek (and may be entitled to daily overtime if she works in a state where that is required). Since she’s non-exempt regardless of being hourly or salaried, all hours worked must be carefully tracked and reviewed each seven-day workweek to ensure that any overtime is paid properly.
As for your second question, an employee’s exemption status is determined by their daily duties and meeting the salary threshold, not their job title, so you are free to leave her job title as is.
We look forward to working with you further!
Celine, SHRM-CP
With eight years of customer service experience under her belt, Céline is proud to bring her healthcare and food service expertise to the team. She’s fluent in French and proficient in Spanish, making her nearly trilingual. Céline serves on the board of a non-profit that organizes a citywide music festival. She loves spending her time exploring the outdoors, playing with her nieces and nephews, and cooking.
