Hired as salary but paid hourly when working under 40hrs

I found this on Reddit and started to write an answer, but it got long, and I thought it should go here instead.

I’m a trainer and am entering the end of my first pay period at a new facility.

My contract states I’m a salaried employee, then in another section states:

Salary: 40 hours per week, $XXk/per year + commission

For various reasons I don’t need to explain, I get my work done in under 30hrs a week and have made the business $12k in two so I’m clearly productive.

When I received my paystub today, I only logged 64hrs and the owner advised that if I don’t hit that 40hr/week mark then my pay is changed to an hourly rate based on my overall salary instead of a flat amount.

Am I just dense or is this sketchy business operation?

This is 100 percent legal. (This whole answer assumes that you meet all the qualifications to be salaried exempt.)

Assuming you’re salaried exempt–that is, you’re not eligible for overtime–they have to pay you the same amount every week.

However, they can change your status to non-exempt (it’s ALWAYS legal to have someone be non-exempt) and give you an hourly rate. They would have to pay you for all hours worked, and if you worked more than 40 hours in a week (or 8 hours in a single day in California and a few other places), then they would owe you overtime pay.

Some people think that exemption means you can do whatever you want if you finish your work. This is not true. Your boss can require you to be in the office 40 hours a week or 80 hours a week or work 24 hours a day (presuming there aren’t state laws preventing it, which there generally aren’t for exempt employees).

They can’t switch you to hourly when you work less than 40 hours a week and make you exempt when you work more. It’s either one or the other. And so if they switch you to hourly and your workload increases and you’re now putting in 50 hours a week, they will have to pay you overtime. They can’t just switch you back and forth; if they make you hourly, then they should double-check with their employment attorney before switching you back to exempt.

But here is something exceedingly important: You’ve worked for this company for two weeks. TWO WEEKS! Many businesses give you a lighter workload when you start because it takes time to learn.

Your boss is understandably concerned that you’re declaring yourself done with your work after 32 hours each week because you’ve been there for TWO WEEKS.

And while your boss is probably not well versed on the finer points of employment law and could have said it more elegantly like, “you’re expected to work a minimum of 40 hours per week, and please ask me if you run out of work,” he’s understandably upset. I’m guessing you didn’t notify him you were cutting out of work, as he’s finding out about this on the paycheck!

Now, one side note on scrupulosity. Here’s what that is:

A form of obsessive compulsive disorder (OCD) involving religious or moral obsessions. Scrupulous individuals are overly concerned that something they thought or did might be a sin or other violation of religious or moral doctrine.

It’s fairly unusual for exempt employees to track their time and have it appear on their paychecks. It’s not illegal to track your time; it’s just unusual if you’re not billing by the hour. If you’re tracking your hours and deducting time for chatting with coworkers or waiting for IT to come to fix your computer because you’re not working, you may suffer from workplace scrupulosity.

I see this with people new to the workforce who are racked with torment if they aren’t productive every minute of every day. If that’s the case, chill a bit. Make yourself available (if working remotely), let your boss know you’re up to date and need another task, and stay at the office for 40 hours a week (if you’re in the office, which I suspect as a trainer, you might be).

But, if that’s not your issue, put in 40 hours a week. It’s what your boss expected when he hired you. You can negotiate if you’ve been there a long time and proven how effective you are. But, right now? You’ve been there for TWO WEEKS. Your boss just gave you some clear feedback. Follow it.

Image by Gerd Altmann from Pixabay

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4 thoughts on “Hired as salary but paid hourly when working under 40hrs

  1. I like the response to this “complaint” by a salaried employee, who, obviously, is work efficient enough to get their weekly work assignment done in less time but resents having to put in a full week, totally forgetting the fact that their salary is based on a 40 hour work week. Too many salaried employees figure that all they have to do is the weekly assignment and don’t need to ask for more work if they finish early and they are entitled to do whatever they want with the extra free hours left in the work week without doing any more work(something an hourly person who leaves early knows they will be docked for). Yes, there’s the opposite problem when the work assignment requires more than 40 hours in the same week to achieve, then the salaried employee can apply the time over 40 from one week to the following week and get time off without losing anything on their salary.
    But EvilHRlady is stating very clearly that if you prefer to be paid by salary versus hourly, then you have to accept that you still have to work the hours that salary is based on.

  2. I wonder if the poster is a government contractor. Being a salaried Gov contractor is a whole different can of worms. We track our time in 1/20 of an hour (6 minute) increments. We are allowed a total of 20 minutes per day of non-productive time (bathroom, break room, whatever) and all else must be logged to a specific work authorization number by task. If we work under 80 hours in the 2 week pay period, then we must take PTO. Before we go over 80 we must request permission for Extended Work Week hours, or not get paid for those hours. It’s a very different culture than other jobs.

  3. I always thought the nature of the job duties was a major determinant in whether one was classified as exempt or non-exempt. But, it sounds like the employer can just switch you back and forth, willy-nilly, to benefit themselves.

    1. They can’t switch you back and forth willy-nilly, but they can pick to pay you hourly. Once they pick that, they need to stick with it. Otherwise, the DOL cracks down on you.

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