We currently have multiple salaried, nonexempt employees in our office. They are never required to work overtime, however, I want to ensure that we are following the correct protocol and are protected given the recent changes to the FLSA. Should these employees be entering/submitting hours each week even though they are paid on a salaried basis and never work more than 40 hours/week? Should we consider converting them to hourly?
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Thank you for your inquiry regarding salaried, nonexempt employees.
The FLSA required employers to keep records of hours worked by nonexempt employees, regardless of whether they are paid on a salaried or hourly basis. Time records must show the date and time a worker’s workweek starts, the number of hours worked each day, and the total hours worked during the week.
As long as the employer is keeping the required records of the hours worked by the employees and is paying the employees required overtime (if any), there is no need to convert the employees to an hourly basis for pay. Note, that the salary paid to a nonexempt employee, when divided by the number of hours actually worked, must meet or exceed the applicable minimum wage rate.
There are times when paying a nonexempt employee on a salary basis is convenient and efficient for an employer. For example, the salary basis for nonexempt employees may be desirable for small employers who do not outsource their payroll and who open and close at fixed times leaving little or no opportunity for employees to work overtime.
However, for many other employers, paying nonexempt employees on a salaried basis is not advantageous, in large part because there is a chance that overtime rules will be inadvertently violated by overlooking timekeeping requirements. For more information, see the Timekeeping topic page on HR.BLR.com.