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Am I
salaried or hourly?
Q. I recently hired on to a new company and could use some
advice. On my second interview with my new company, I was offered a salary on a
yearly basis. I accepted this offer and began work. The paperwork I signed
accepting this offer also had the same figure termed as "annual."
After one month of
working, the company was purchased by a leading retailer. They announced this to
all the employees and said that we would be a wholesale division of the
retailer. When I received my "Welcome to the team!" letter from this retailer, I
was addressed as an hourly employee. This was surprising, to say the least.
I thought I
accepted a salaried position and now I'm being classified as hourly. After all,
I was offered compensation termed as "annual," I don't "punch" in or out (or any
other time sheet for that matter), and I came from a salaried position at my
former employer. Therefore, I was sure that there must be a mistake, so I
directly went to the individual who made me the offer not six weeks earlier.
I explained my
concern to him and he told me he would get back to me.
After a week I
asked him about it again and he told me that there is a federal law that says
only certain positions are eligible for salaried compensation and I do not meet
those requirements - specifically, the number of employees I directly supervise.
Is there really a federal law concerning this situation?
A. Your company is right; there is federal law
called the Fair Labor Standards Act that does require that certain jobs are
either exempt or not exempt from the law. There are several tests that determine
a job's exemption from the law. More information can be found at the Department of Labor's website. Without knowing the specifics
of your job description, I have to say that it is possible that your job is not
exempt and does requires your company to classify your job as nonexempt.
I know
you may perceive this new classification as a bad thing however; I would
encourage you to look at some of the positive aspects of this change. For
instance, if you work more than 40 hours a week you will receive time and a
half. If you have to come in on a weekend or holiday after you have worked for
40 hours, you may receive double time and a half.
Having
said all that, I would ask your Human Resources Department to explain to you why
your job has been recently classified as a nonexempt job. Even if you disagree
with the decision you ought to be able to understand the rationale behind their
decision. It's also important to keep in mind that regardless of whether you're
job is exempt or not exempt from the federal law it is very important the
company pay you a competitive rate. So, whether or not the company decides to
change your status, make sure they pay you a competitive rate for the position.
Good
luck.
- Erisa Ojimba, Certified
Compensation Consultant
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