Can an employer reclassify an employee as salaried/exempt to avoid paying overtime?

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Can an employer reclassify an employee as salaried/exempt to avoid paying overtime?

My husband has worked as an hourly employee for his company for 11 years. For the last 8 years, he has averaged over 24% of his income in overtime pay. His company notified him this week that at the beginning of next week, he will be a salaried employee with no overtime. He believes that they have reclassified him in order to avoid paying him overtime but because he is the only person at his job that can perform certain skilled duties (i.e. program their existing

phone systems), he will still be expected to work the same amount of hours as he now does.

We have looked online at job labor laws but we can find nothing that actually addresses this issue. They presented this new classification as an

Asked on May 5, 2016 under Employment Labor Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Yes, an employer may change an employee from hourly to salaried, even if that has a negative impact on the employee's total earnings (e.g. overtime): how, and how much, to pay  employees is completely under the employer's control (unless, that is, your husband has an employment contract specifying how and how much he is paid; if so, the employer may not violate that contract).
However, for your husband to be exempt from overtime, it's not enough that he be salaried; he must be salaried, earning at least $455/week in gross pay, *and* his job responsibilities and authority must meet one or more of the tests to be exempt from overtime. Those tests can be found on the U.S. Department of Labor website, under "overtime". He should compare his job to those tests (the main ones are the Executive, which really should just be "Managerial," Professional, and Administrative tests). If his job does not qualify under one or more tests, he will still receive overtime even if salaried, when we works more than 40 hours in  week; and if not paid overtime in that circumstance, could file a wage and hour complaint with the federal or state dept. of labor.


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