Can I Convert an Hourly Employee to a Salary?

Q.  I have an hourly billing clerk who often ends up working overtime. I can cut costs by giving her a raise and putting her on salary. Do labor laws allow this?

A. No. Granting an employee exempt (from overtime) status  by placing her on salary as opposed to paying an hourly wage is not something you can do arbitrarily. The Fair Labor Standards Act lays out requirements for classifying employees as exempt vs. nonexempt. Use this FLSA Fair Pay Exemption Questionnaire to help you determine which employees in your office are exempt and which are nonexempt.

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