Q: We have a manager whose hours have been reduced to 20 per week. As a result, she does not meet the minimum salary requirement to maintain her exempt status. Does she need to be reclassified as an hourly non-exempt employee? If so, would the manager’s title need to change?
A: Since this manager no longer meets the minimum salary requirement to qualify as exempt, you are correct that she needs to be reclassified as non-exempt. However, you still have an option between 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.
Regarding a title change, 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.
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