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Example of a salaried non-exempt? Not a contradiction in terms? What about hourly exempt?
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Example of a salaried non-exempt? Not a contradiction in terms? What about hourly exempt?
Discuss employment-law issues such as family leave, overtime, disabilities law, harassment, immigration and termination.
Many seem to use the following shorthand for classifying employees:
Hourly = Non-exempt
Salaried = Exempt
Seems however that there are hybrids, e.g. salaried non-exempt. Some questions:
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Example of a salaried non-exempt? Not a contradiction in terms? What about hourly exempt?
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Example of a salaried non-exempt? Not a contradiction in terms? What about hourly exempt?
posted at 7/20/2009 11:34 PM EDT
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Posts: 49
First: 7/18/2009 Last: 8/17/2011 |
Many seem to use the following shorthand for classifying employees:
Hourly = Non-exempt Salaried = Exempt Seems however that there are hybrids, e.g. salaried non-exempt. Some questions: 1) Please give an example of a salaried non-exempt and how that differs from a salaried exempt. Would it be someone who earns more than $455 a week, yet has little autonomy in making decisions in executing her work? Or is it the converse? e.g. someone who earns less than $455 a week yet makes many decisions on how her work is to be executed? 2) Is a salaried non-exempt a "rare bird?" e.g. how common or uncommon is this classification? 3) In what types of orgs / industries are you most likely to find salaried non-exempts? Also, what's the best book on employment law, for a lay person, that has strong coverage on compliance with the FLSA? Thanks very much. Mike |
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Example of a salaried non-exempt? Not a contradiction in terms? What about hourly exempt?
posted at 7/21/2009 2:47 AM EDT
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Posts: 1771
First: 10/24/2002 Last: 9/14/2011 |
"Salaried" and "hourly" are payroll terms and have nothing whatsoever to do with "exempt" and "non-exempt". Generally, people who say salaried or hourly when they really mean exempt or non-exempt have a poor (if any) understanding of wage and hour laws. Most HR folk don't make this mistake.
Examples of typical salaried non-exempt positions include: file clerk receptionist customer service rep accounts payable clerk bookkeeper marketing coordinator While hourly exempt positions are rarer, they can exist. An example of an hourly exempt position would be, well, my own job a few years ago. I was the HR Director for a mid-sized company and I had four direct reports. While their weekly hours were fairly steady, mine weren't (for a variety of reasons not relevant to this post) - they varied anywhere from 10 hours in some weeks to 60-70 hours in other weeks. So I was paid by the hour. However, because of my hiring and firing and other authority, and the fact that even in the 10-hour weeks my weekly pay exceeded the minimum for exempt jobs, my job was therefore deemed - correctly - to be non-exempt. (And as a result, I didn't get OT premium pay for those weeks in which my hours exceeded 40...oh well.) |
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Example of a salaried non-exempt? Not a contradiction in terms? What about hourly exempt?
posted at 7/21/2009 4:19 AM EDT
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Posts: 237
First: 7/10/2007 Last: 8/31/2011 |
I have dealt with both at one time or another. You can pay a non-exempt employee a salary but you still have to keep track of hours worked and pay OT, so I fail to see the any advantage to doing so.
I actually worked a contract once as an hourly-exempt employee. Since I was working way over 40 hrs a week I certainly didnt mind even though the extra hours werent at OT rate. Had that employer paid me a flat salary (based on the same wage) I wouldnt have made nearly as much. I believe that employer did so because the work hours were irregular and there were times when there was nothing to do so they could send us home. |
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Example of a salaried non-exempt? Not a contradiction in terms? What about hourly exempt?
posted at 7/21/2009 6:10 AM EDT
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Posts: 1103
First: 3/16/2007 Last: 8/19/2011 |
hrbth if i recall you are located in Canada so the laws regarding "hourly exempt" my be different there.
However, in the case you illustrate about yourself, in the US, you were NOT in fact exempt because of one simple step. You were not paid on a salary basis for the hours you worked (meaning your weekly wages did not change from week to week based upon the quality of quantity of your work. [§ 541.602 Salary basis. (a) General rule. An employee will be considered to be paid on a salary basis within the meaning of these regulations if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employees compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed. ] Now it is possible that your base rate never deviated below $455 and that your employer considered pay above that to fall under the guidelines of b]29 C.F.R. 541.118 ( provides that "additional compensation besides the salary is not inconsistent with the salary basis of payment". DOL's Field Operations Handbook, Section 22b01, states that "Extra compensation may be paid for OT to an exempt employee on any basis. The OT payment need not be at time and one-half, but may be at straight time, or flat sum, or on any other basis." The bottom line then becomes that you were paid a salary (at least $455 a week and this did not change) and then everything else was as stated. I would also invite your attention to "§ 541.600 Amount of salary required. (a) To qualify as an exempt executive, administrative or professional employee under section 13(a)(1) of the Act, an employee must be compensated on a salary basis at a rate of not less than $455 per week (or $380 per week, if employed in American Samoa by employers other than the Federal Government), exclusive of board, lodging or other facilities. Administrative and professional employees may also be paid on a fee basis, as defined in § 541.605. (b) The $455 a week may be translated into equivalent amounts for periods longer than one week. The requirement will be met if the employee is compensated biweekly on a salary basis of $910, semimonthly on a salary basis of $985.83, or monthly on a salary basis of $1,971.66. However, the shortest period of payment that will meet this compensation requirement is one week. " Other hourly exempt positions are: certain computer professionals if paid more than $27.63 an hour; certain teachers in certain environments, etc. Of course all of this only applies if the individual is covered by the FLSA. Not everyone is (Some jobs are specifically excluded in the statute itself. For example, employees of movie theaters and many agricultural workers are not governed by the FLSA overtime rules. Another type of exclusion is for jobs which are governed by some other specific federal labor law. As a general rule, if a job is governed by some other federal labor law, the FLSA does not apply. For example, most railroad workers are governed by the Railway Labor Act, and many truck drivers are governed by the Motor Carriers Act, and not the FLSA. Many of FLSA exclusions are found in §213 of the FLSA.) As to the question what is a good reference to the FLSA? The best one I have every used is the Thompsons Guide to the Fair Labor Standards Act from Thompson Publishing. A bit pricey but if you deal with a lot of FLSA issues or are in an immature company trying to create solid structure it is well worth the cost of $489.00. http://www.thompson.com/public/offerpage.jsp?promo=WAGE |
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Example of a salaried non-exempt? Not a contradiction in terms? What about hourly exempt?
posted at 7/21/2009 6:59 AM EDT
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Posts: 1771
First: 10/24/2002 Last: 9/14/2011 |
I forgot about the same-weekly-pay thing in the US, and stand corrected. However, please note that everything else I said was with US law in mind.
I am currently in Canada, however, that doesn't mean that Canadian employment law is the only employment law with which I have experience. I have more than eight years' experience managing/directing the HR function for organizations in the US - in fact, I currently direct the HR function for 83 employees in California! - and I possess more than a little working knowledge of US employment law. Given that 99% of the posters here are American, I wear my American hat when I'm responding to questions in these forums. |
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Example of a salaried non-exempt? Not a contradiction in terms? What about hourly exempt?
posted at 7/21/2009 8:24 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
I know it is slugging through the regs, but I honestly think everyone dealing with the FLSA should read the actual regulations themselves...at least section 785 hours worked, 541 regarding exemptions, 778 on overtime, just to name a few.
I would also suggest reading through DOL opinion letters to see some interpretation of the FLSA. That is how I have built most of my knowledge. Another great set of articles where non-exempt salaried is explained pretty well is : http://payroll-taxes.com/articles/salaryAlternatives.html There he states "Paying an employee a salary often results in cost savings by cutting the administrative costs associated with issuing a paycheck. But there are also salary strategies that can actually reduce wage costs." So I would suggest reading through the 3-4 articles under that section. |
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Example of a salaried non-exempt? Not a contradiction in terms? What about hourly exempt?
posted at 7/23/2009 12:34 AM EDT
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Posts: 49
First: 7/18/2009 Last: 8/17/2011 |
Thanks all and rrupert. Going to the Primary Sources (regulations and opinions) probably is the best way to learn. At least in bits and pieces. I think it can be a bit overwhelming to a layperson who has to understand enough of it to do a job without incurring any liability. |
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Example of a salaried non-exempt? Not a contradiction in terms? What about hourly exempt?
posted at 7/24/2009 8:38 AM EDT
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Posts: 15
First: 9/18/2008 Last: 5/13/2011 |
There is one category of exempts that may be paid on an hourly basis - computer professionals earning at least $27.63/hour. No OT required, just base hourly pay for all hours worked. |
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