employee classification

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employee classification

I was hired as a salried employee in Michigan, however my employer now tells us all salried workers except department heads must work as hourly. He tells us that the new laws require it. Can you shed some light on this?

Asked on October 16, 2017 under Employment Labor Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

There have been no changes to the labor laws requiring a reclassification from salary to hourly; more generally, employees can pay anyone on either a salary or hourly basis: the most junior mailroom guy/girl can be salaried and the president/CEO hourly. 
The above said, many salaried employees are NOT overtime exempt, because either their salary is not high enough (at least $23,600/year) or because they don't have sufficient authority or discretion to meet one of the "tests" or criteria for exemption. To be exempt, it's not enough to be paid on a salary basis; you also have to meet one of the tests for exemption, like the "executive" exemption, "administrative employee" exemption, "professional" exemption, etc., which can be found on the U.S. Dept. of Labor website, under "overtime." Unless a person's job duties and responsibilities meets at least one of these tests, they would get overtime, even if paid on a salary basis.
It can be difficult adminstratively to pay salaried employees overtime--you have to track their time even though they are salaried; the calculations are not as straightforward as with hourly employees; etc. If the company has decided that you and similar employees are not in fact exempt, it would make more sense to make you hourly-if you're going to be overtime eligible, you should best be paid hourly.


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