Question: We have a manager whose hours have been reduced to 20 per week. As a result, he does not meet the minimum salary requirement to maintain his exempt status. Does he need to be reclassified as an hourly non-exempt employee? If so, would the manager’s title need to change?
Answer: You are correct that since this manager no longer meets the minimum salary requirement to qualify as exempt, he needs to be reclassified as non-exempt. However, you still have an option between classifying him 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 he would be paid for exactly the number of hours he works each week, whether that’s 15.5, 20, or 28.25. If you choose to make his salaried non-exempt, you will agree to pay him the same amount for each week when he performs 40 hours or fewer of work.
Regardless of how pay is issued, he must be paid time and a half for hours worked over 40 in a workweek (and may be entitled to daily overtime if he works in a state where that is required). Since he is 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 his job title as-is.
Should you have any additional question please contact CyQuest!