Salary vs. hourly question

[wambam]

My H has been offered a sort of "overtime." His company sees how much he does and how necessary he is to the company and has offered him something interesting. My H frequently works more than 40 hours per week. He has a skill set (programming and manning a CNC router) that makes him very in demand at his company. All the managers want him on their projects because he gets things done and does them well. *Very* rarely his company goes through slow periods where there aren't many projects and during those times, he may only work 30-35 hours.

Right now, he is a salaried employee, but on his paycheck, they put what his hourly rate is. His company is offering to pay him hourly for accounting purposes only. So he would get paid for additional hours he works beyond 40 per week. However, if he only works 30 hours, he'd only get paid for those hours. All benefits would remain the same, as if he were a salaried employee.

This sounds like a no brainer - getting paid for hours he's going to be working anyways. Would you be comfortable with this? Are there questions you would want to ask about this arrangement?

I am fairly risk averse and hesitant about change, which is why I'm asking here.

[iammalcolmx]

I would ask how often they felt her would go below 30 hours, you are not entitled to Health Coverage if you work less than 30 hours however the calculation is done over a period of time not just for one pay period. Do you know why they are doing this all of a sudden? I wonder if he was misclassified all this time and the company is trying to cover their ass. If you are misclassified as Exempt, and are not, you are entitled to 3 years pay OT pay.

[thinkofthesoldiers]

So they wouldn't pay him 40 hours for the weeks he only works 30? H's position is paid for 40 hrs no matter what, but overtime is paid and/or comp time is given for any time he goes over 40. Would they consider that?

[wambam]

Aug 3, 2015 8:09:32 GMT -5 iammalcolmx said:

I would ask how often they felt her would go below 30 hours, you are not entitled to Health Coverage if you work less than 30 hours however the calculation is done over a period of time not just for one pay period. Do you know why they are doing this all of a sudden? I wonder if he was misclassified all this time and the company is trying to cover their ass. If you are misclassified as Exempt, and are not, you are entitled to 3 years pay OT pay.

They explained it to him as it being a reward for his hard work. They see how much work he does above and beyond and want to reward him for that. It's also an incentive for him to keep doing that.

I definitely don't think he was misclassified. His position is a professional position and he is definitely exempt.

[wambam]

Aug 3, 2015 8:12:03 GMT -5 Lucy Honeychurch said:

This seems a little vague to me. Is he exempt? Non-exempt? I guess I'd want to know exactly how his position is classified, and if they're changing him from exempt to non.

I guess I'd be a little wary that they know something I don't -- e.g., that hours will be shorter going forward.

He is exempt.

Re: the bolded - this is a question I had. Are you guaranteed hours? And he is going to ask this question.

[underwaterrhymes]

Honestly, I'd be worried they were dangling a carrot with the intention of decreasing his hours.

[wambam]

Aug 3, 2015 8:15:02 GMT -5 pinkplasticdoll said:

I have known people who are paid salary and then anything they clock over 40 hours is paid as overtime ( time and a half). If he can negotiate them to do that it might be a better option .

This happened during a special project last year where they needed people to work around the clock. That's actually how we paid most of our down payment on our house haha. It's definitely something he can ask about.

[CurlyQ284]

DH is hourly because he's a contractor. I used to be paid hourly but my position changed and I'm salary now. We have both always had 40 hours. Even if it's slow, I pitch in where needed, clean up files etc. DH is in IT and he will help organize the warehouse with all the equipment, catch up on paperwork and things like that. We were both paid for hours worked over 40.

I wouldn't like getting paid less than 40 hours.

[iammalcolmx]

Aug 3, 2015 8:14:04 GMT -5 wambam said:

Aug 3, 2015 8:12:03 GMT -5 Lucy Honeychurch said:

This seems a little vague to me. Is he exempt? Non-exempt? I guess I'd want to know exactly how his position is classified, and if they're changing him from exempt to non.

I guess I'd be a little wary that they know something I don't -- e.g., that hours will be shorter going forward.

He is exempt.

Re: the bolded - this is a question I had. Are you guaranteed hours? And he is going to ask this question.

Your OP seems as if they are classifying him as Non-Exempt.

[wambam]

Aug 3, 2015 8:17:17 GMT -5 RamblingRose said:

I'd ask how it affects benefits, bonuses, PTO, profit sharing.
The idea of shifting from exempt to non-exempt worries me. Could he counter with getting comp time for the extra hours?

This is what's happening now. He's accruing PTO that he never has any hope of using because he has so much to do. So, unfortunately, that's not really what he wants.

[Deleted]

Aug 3, 2015 8:12:59 GMT -5 wambam said:

Aug 3, 2015 8:09:32 GMT -5 iammalcolmx said:

I would ask how often they felt her would go below 30 hours, you are not entitled to Health Coverage if you work less than 30 hours however the calculation is done over a period of time not just for one pay period. Do you know why they are doing this all of a sudden? I wonder if he was misclassified all this time and the company is trying to cover their ass. If you are misclassified as Exempt, and are not, you are entitled to 3 years pay OT pay.

They explained it to him as it being a reward for his hard work. They see how much work he does above and beyond and want to reward him for that. It's also an incentive for him to keep doing that.

I definitely don't think he was misclassified. His position is a professional position and he is definitely exempt.

So why not just give him a raise, or a bonus?

How much over 40 hours does he usually work?  Would you be able to be by on what he makes the pay periods he only works 30 hours? Is his industry strong/are hours guaranteed?

[wambam]

Aug 3, 2015 8:17:07 GMT -5 iammalcolmx said:

Aug 3, 2015 8:14:04 GMT -5 wambam said:

He is exempt.

Re: the bolded - this is a question I had. Are you guaranteed hours? And he is going to ask this question.

Your OP seems as if they are classifying him as Non-Exempt.

Perhaps I'm confused then about the terminology. He is currently salaried and does not receive overtime (except in the special circumstance last year when salaried employees were offered overtime for a specific project).

[iammalcolmx]

Aug 3, 2015 8:18:29 GMT -5 wambam said:

Aug 3, 2015 8:17:17 GMT -5 RamblingRose said:

I'd ask how it affects benefits, bonuses, PTO, profit sharing.
The idea of shifting from exempt to non-exempt worries me. Could he counter with getting comp time for the extra hours?

This is what's happening now. He's accruing PTO that he never has any hope of using because he has so much to do. So, unfortunately, that's not really what he wants.

I don't blame him, I would rather be paid time and a half.  Comp time is a way for businesses to reduce their expenses, we don't have it here.

[iammalcolmx]

Aug 3, 2015 8:19:54 GMT -5 wambam said:

Aug 3, 2015 8:17:07 GMT -5 iammalcolmx said:

Your OP seems as if they are classifying him as Non-Exempt.

Perhaps I'm confused then about the terminology. He is currently salaried and does not receive overtime (except in the special circumstance last year when salaried employees were offered overtime for a specific project).

No problem it's sorta confusing. I am greedy and about my monies, I told them here be BET NOT EVER make me exempt. However, my job is such that I am never not going to get 40 hours.

[sonrisa]

So what happens to the PTO he has already accrued?

[wambam]

Aug 3, 2015 8:19:46 GMT -5 @kjewell said:

Aug 3, 2015 8:12:59 GMT -5 wambam said:

They explained it to him as it being a reward for his hard work. They see how much work he does above and beyond and want to reward him for that. It's also an incentive for him to keep doing that.

I definitely don't think he was misclassified. His position is a professional position and he is definitely exempt.

So why not just give him a raise, or a bonus?

How much over 40 hours does he usually work?  Would you be able to be by on what he makes the pay periods he only works 30 hours? Is his industry strong/are hours guaranteed?

I'm not sure why he's not just being offered a bonus. He did get a raise a few weeks ago.

He usually works at least 50 hours. We would be able to get by if he only worked 30 hours a few pay periods. His industry is strong. He is going to ask about hours being guaranteed, but I don't have the answer to that question at this point.

Thanks for helping me talk this out, everyone. This really is helpful.

[wambam]

Aug 3, 2015 8:21:17 GMT -5 sonrisa said:

So what happens to the PTO he has already accrued?

His company allows them to roll over a certain number of hours every year (I forget the exact amount) and that won't change.

[thebreakfastclub]

As it stands today, if there is 30 hours of work in a given week, can he just work 4 days and go home? Or does he still come in 5 days?

[shopgirl07]

It sounds like it could have too many variables. I'd stay salaried and exempt and ask for a raise or a yearly bonus.

[wambam]

Aug 3, 2015 8:23:47 GMT -5 thebreakfastclub said:

As it stands today, if there is 30 hours of work in a given week, can he just work 4 days and go home? Or does he still come in 5 days?

If that's the case, he uses his massive amounts of PTO.

Seriously, he's got a boat load.

[iammalcolmx]

Aug 3, 2015 8:26:32 GMT -5 wambam said:

Aug 3, 2015 8:23:47 GMT -5 thebreakfastclub said:

As it stands today, if there is 30 hours of work in a given week, can he just work 4 days and go home? Or does he still come in 5 days?

If that's the case, he uses his massive amounts of PTO.

Seriously, he's got a boat load.

Chile them let them pay him the OT.

[ZoeHart]

If he would rarely be under 30 anyway, I would counter that I wanted to be salary non-exempt so I got my 40 regardless.
There is a proposed change right now to up the FLSA exempt basis quite a bit (almost double what it is now). Depending on what he makes, if the changes go forward they would have to move to him non exempt anyway, which would be another reason I would fight to stay salary non exempt.

[cabbagecabbage]

I'm a jaded old meanie but I would smell the start of cut hours in this situation. Even if they love him now, three years from now he might have a new boss and a work slump and someone in accounting might be brainstorming ways to save... I'd ask to remain salaried and plead a case for a bonus or overtime on top of that.

[carifly]

Aug 3, 2015 9:40:32 GMT -5 luckydog said:

If he is exempt, he must be paid for a full work week. Period. End of story. Not 30 hours, not 35. A full work week.

If they choose to pay more, awesome. But they CANNOT make him hourly if he really is exempt. They can build in bonuses and what not.

Get it all in writing. Listing the hourly rate on his paystub doesn't matter, it's just for calculation purposes like pto, etc.

This is sort of right...but as long as they guarantee him a weekly pay amount that is higher than $455/wk ($951/wk under the proposed rule change), they could have his work week be for less than 40 hours and then pay him additional compensation each week based on hours worked over the base amount. This would still meet the salary basis test and not cause him to be automatically considered non-exempt.

I'd make sure he has everything in writing, because if they don't guarantee his base salary and they are considering him non-exempt he'd be entitled to time and a half for overtime.

[gault]

Salaried is not the same as exempt.

Salaried = you are paid on a yearly wage, like 45k/yr. If you work 50 hours one week and 35 the next, you are paid the same amount of money. So, if you worked 50 hours one week, and 35 hours the next, your hourly pay translates into different amounts to fit into the yearly wage.
Hourly = you are paid per hour you work. $24/hr. If you work 30 hours one week and 40 the next, you are paid precisely for the hours worked.

Exempt = the employee is not eligible for overtime pay, either because they do high-level work, or supervise employees a certain percentage of their work day. So working 50 hours per week does not get you 10 hours of overtime. Usually, employees who are exempt are also salaried.
Non-exempt = You can obtain overtime if you work more than 40 hours per week (depending on OT rules in your state. CA grants overtime with over 8 hours worked a day). Most of the time, non-exempt employees are also hourly.

It sounds like they want to classify him as non-exempt to get overtime, and also change his wage to hourly for that purpose on any given week he works over 40 hours. Which is pretty weird. Or, they are permanently switching him to non-exempt and hourly?

[isabel]

Yeah, I think I would want to stay exempt with a flat salary and make them pay an hourly rate for any overtime. Doesn't necessarily have to be time and a half, just his hourly rate based on 40 hours/week for any hours he goes over 40. I hope that makes sense.

[ECB]

I don't know the law behind it and I don't know who really governs this, but switching employees to exempt vs non-exempt isn't really supposed to be about $$. It's about the job and what the job entails. if his job has been determined to be an exempt job,a company can't (I use that word loosely here) just decide "Oh- we want to give him OT. We'll make him non-exempt".

Especially, because technically, if he really wanted to pursue it - "oh, my job is NON-exempt? You owe me time and a 1/2 for the past X years".