Is it legal for an employer to change their salary exempt manager to hourly non-exempt and reduce the hourly rate but make them work more hours to make up lost wages?

UPDATED: Sep 30, 2022

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Is it legal for an employer to change their salary exempt manager to hourly non-exempt and reduce the hourly rate but make them work more hours to make up lost wages?

I am currently employed as a store manager for a gas station management company making $41600/yr. Our normal work hours are 6 am to 3 pm Monday to Friday. Sometimes we stay for an hour or so depending on the needs of the business. Last week, we were told that we would be converting to hourly non-exempt starting next week. The problem is that, in my case for example, they are changing my rate to $14.55/hr. and to make up for the difference, I will now have to work 10 hours of OT/week. The problem is if I missed some OT hours, I’d be taking home less money. Why do we now have to work more hours just to make the same income? Is it legal? Isn’t there a law that is supposed to protect salary exempt employees from such changes by the employer/s?

Asked on September 13, 2016 under Employment Labor Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

No, there is no law protecting salaried exempt employees from being converted to hourly non-exempt: it is 100% up to the employer  how (and how much) to pay employees, and they can change, reduce, etc. your wage or salary at will. Blame this on the Administration: their change in the labor rules so that salaried employees making less than $47,476 per year are no longer exempt from overtime--that is, a salaried employee earning what you did would now be eligible for overtime, despite being salaried--means that there is no advantage to keep ing someone at your income level salaried; since they'd have to pay you overtime, they may as well convert you to hourly, which gives them more control over your hours and what you are paid.

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