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Workforce Management Community Center Forum Index � � Legal Forum � � salary, nonexempt status

Author	salary, nonexempt status
hrdir6192 Joined: Sep 13, 2001 Posts: 216	Posted: 2004-12-22 06:38 Can someone clarify for me what is the requirement for an employee to have this pay class. Can any hourly employee be classified as this or does the job description still have a key part in determining how to classify an employee.
howard7 Joined: Sep 13, 2001 Posts: 2618	Posted: 2004-12-22 09:52 A salaried non exempt person would be someone who is eligible for overtime but normally paid a fixed wage. The hourly portion would only come into play for overtime payments or if a portion of their time was unpaid during a payperiod. You would not use this for non exempt staff where you are not certain in advance that they will be working a regular full 40 hour work schedule the vast majority of the time.
hrdir6192 Joined: Sep 13, 2001 Posts: 216	Posted: 2004-12-22 10:30 So any nonexempt employee (ie. clerk) could be classified as salary, non exempt? Or do certain job requirements come into play?
howard7 Joined: Sep 13, 2001 Posts: 2618	Posted: 2004-12-22 11:16 So any nonexempt employee (ie. clerk) could be classified as salary, non exempt? YES Or do certain job requirements come into play? NO I am also assuming that we are not talking about collectively bargained for employees.
CompKerry Joined: Jan 22, 2004 Posts: 104	Posted: 2004-12-22 11:19 There is no legal classifcation of salaried non-exempt. The Fair Labor Standards Act (FLSA) classifies individuals as either exempt or non-exempt. The concept of salaried non-exempt has come about from some companies finding it administratively easier to pay non-exempts a fixed rate. This usually happens when the employee works a set schedule with a fixed number of hours and has little or no opportunity for overtime. However, please keep in mind that even if you pay a non-exempt employee a salary you are still required to pay time and a half for any and all overtime worked.
Hatchetman Joined: Sep 13, 2001 Posts: 1609	Posted: 2004-12-22 13:07 Many emplyers misunderstand the issue about a salaried non-exmept. A salary tradtionally is a fixed amount of comensation for set period of time. It does not vary based upon hours/days worked or quality or quantity of work. FLSA has two basic references to the non-exmepts who recieve a salary: 1) those who regularly work a fluctuating schedule from week to week, sometimes under 40 hours a week and sometimes over 40; 2)those who work a fixed schedule and what happens when more than 40 hours are worked in a work week. For the fluctuating workweek salaried employee, there is no reduction in their salary when fewer horus or days are worked (this is differrnt from exempt slaaireds, where full day absences may be docked). Thus, the salaried non-exmept who works a flucuating schedule described above, doesn't have any docking of salary if there is an absence for a full day or any missed hours. On the other hand when and if the employee works more than 40 hours, then the emplyer only need to be half time for the time hours in excess of 40. The hourly rate decreases as the total number of hours worked increases. The half time is then paid on the hourly rate determined by the weekly salary divided by the actual number of hours worked. Because the salaried, non-exmept must still earn minimum wage, the salary still has be be large enough to account for many hours being worked and still meeting the minimum wage rate. Thus, the employer needs to calculate what would be the anticipated maximum number of hours worked and determine if minimum wage rate would still be met (independent of the half time). Remember, there must be a very clear understanding and agreement by the emplyee for salaried non-exmept status and the pay that will be issued. You begin to see it can become quite expensive to the employer. In the second scenario the employee works a fixed schedule, it does not vary from week to week. Again, the employee's is paid the same salary. If the salary is based upon the anticipated or expected or intended number of hours the employee is suppose to work (simply divide the salary by the expected number of hours the meplyee is suppose to work). When more than 40 hour are worked, the emplyer than pays time and a half for those overtime hours (more than 40). so, if the employee is suppose to work 30 hours wek for $300 per week, then the hourly rate is $10. Between the 30th and 40th hours, the emplyee receives an additonal $100 ($10 per hour for those additional 10 hours) When more than 40 hours are worke, the emplyee is then paid $15 per hour for the FLSA overtime. Total pay for when 45 hours are worked in the work week in this situation would be $475 ($300 + $100 + $75). In this second situaiton, the regualtions do not prohbiit the emplyer from docking the salary for missed hours. However, they note that if and when the employer does that, in effect the employer is treating the employee as an hourly.
marcNV Joined: Jun 30, 2004 Posts: 409	Posted: 2004-12-23 09:44 Hatchetman, your knowledge of this area is truly awesome. But I admit I still don't really get your first example. To help clarify, am I to understand that an EE in that that was receiving $400 for a fluctuating schedule is basically making $10 per hour. If those hours rise to 50 hours, the next 10 hours, are paid at $5 per hour? Total compensation for that week would be $450? On the flip side, if this EE only worked 20 hours, the pay would still be $400.
Hatchetman Joined: Sep 13, 2001 Posts: 1609	Posted: 2004-12-23 18:57 Yes. The salqry remains the same, but technically hte hourly rate changes based upon the number of hours worked. Using a fluctuating scheule, in which th emeplyee will work roughly under 40 as much as he or she will work over 40, let's say the salary is $5400 per week. In the week that the employee only work 25 hours, the hourly rate for that weeks salary is $25. When the emplyee works 40 hours exactly the hourly rate is $12.50. If 50 hjours are work, then the rate is $10 an hour...plus at that point for the final 10 hours, another $5 per hour. So, for the 50 hour week, the total is %500 pulus $50. Remember, undre this mechanism, you will see that FLSA consider straight time rate to be included, so that only the half time over overtime then has to be added. From the somewhat confusing example givne in the FLSA regus regarding salary for fluctuating schedules (29CFR778.114b): "The application of the principles above stated [stated in .114a] may be illustrated by the case of an employee whose hours of work do not customarily follow a regular schedule but vary from week to week, whose overtime work is never in excess of 50 hours in a workweek, and whose salary of $250 a week is paid with the understanding that it constitutes his compensation, except for overtime premiums, for whatever hours are worked in the workweek. If during the course of 4 weeks this employee works 40, 44, 50, and 48 hours, his regular hourly rate of pay in each of these weeks is approximately $6.25, $5.68, $5, and $5.21, respectively. Since the employee has already received straight-time compensation on a salary basis for all hours worked, only additional half-time pay is due. For the first week the employee is entitled to be paid $250; for the second week $261.36 ($250 plus 4 hours at $2.84, or 40 hours at $5.68 plus 4 hours at $8.52); for the third week $275 ($250 plus 10 hours at $2.50, or 40 hours at $5 plus 10 hours at $7.50); for the fourth week approximately $270.88 ($250 plus 8 hours at $2.61 or 40 hours at $5.21 plus 8 hours at $7.82)."
Hatchetman Joined: Sep 13, 2001 Posts: 1609	Posted: 2004-12-23 19:01 Oops, my first example should have said $20 per hour, not $25. If the emplyee worked 20 hours, then the hourly rate would be $25.