Salary to Hourly

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Salary to Hourly

Should I be concerned that I’m being switched from Salary to Hourly? I feel like
this is a demotion. I’m in Texas by the way.

Asked on August 4, 2017 under Employment Labor Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Whether you should be concerned is something we cannot comment on--it depends on your situation, your relationship with the employer, etc.
But we can say that from a legal perspective, this is NOT a demotion: hourly vs. salary is just a matter of how you pay employees--it has nothing to do with how (or how much) you value them. Legally, other than in calculation of wages (and potentially, eligibility for overtime) there is no difference. The company may be doing this to be better compliant with labor and wage law: many salaried employees are not actually exempt from overtime because they don't meet the criteria for it, such as the administrative employee, professional employee, executive employee, etc. tests or criteria (which you can find on the U.S. Department of Labor website, under "overtime"). That means that some salaried employees should be paid an overtime premium when they work more than 40 hours in a week; but it is more awkward to track the time of and calculate overtime for non-exempt salaried staff than hourly. So if your position is one that may not be overtime exempt, your employer may be making you hourly to facilitate wage law compliance.


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