Can a company change you from salary to hourly and then reduce your hourly rate?
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Can a company change you from salary to hourly and then reduce your hourly rate?
I was hired full time salary, then my position without a reasonable explanation was changed but I was still salary. After working in the new position for approximately 8 months, I was changed from salary to hourly when the new Federal overtime law came to light. I was told I was also getting a raise, but when I did the math, I found that I will be making less. I also went without a review or raise for 2 years. Is this legal?
Asked on October 29, 2016 under Employment Labor Law, New Jersey
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
Absent an applicable union agreement or employment contract, most employment is "at will". This means that a company can set the terms and conditions of work much as it sees fit. This typically includes what wage to pay, to whom, and when such a wage can be increased or decreased. That having been said, employers who switch back and forth between classifying salaried exempt employees as hourly non-exempt employeess, and vice versa, may be guilty of incorrectly classifying its workers. The U.S. Department of Labor Wage and Hour Division looks unfavorably on businesses who do this. That having been said, once an employee is classified as salaried exempt or hourly non-exempt, this doesn't necessarily mean that an employer can't change their classification, it's just that there must be a reasonable justification for doing so. For further information you can contact your state's department of labor and/or consult directly with a local employment law attorney.
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