Can an employer change classification from excempt to nonexcempt?

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Can an employer change classification from excempt to nonexcempt?

Is it okay for employer to change classification
after 5 years of employment?

Asked on April 26, 2018 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, it is perfectly legal to change an employee's classification at any time and after any length of employment. Employment is employment at will: the employer defines the job, including how it is paid and how it is classified (so long as the employer follows the labor law in determining if a position is truly exempt). As a general matter, while there are rules about when a job is exempt, there are no rules about non-exemption: even a CEO could be non-exempt, if that's what the company wanted. ("Non-exempt" means "not-exempt from overtime"; a company can choose to pay overtime even when it might not have to.)  Therefore, if the company wants to treat you as non-exempt and pay you overtime, they can; and if they want also, for example, to pay you on an hourly, not salaried basis, that is their choice--the law does not mandate one or the other.


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