Paying exempt employees on an hourly basis — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Paying exempt employees on an hourly basis

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Q. We have several positions that satisfy the duties tests for the so-called “white collar” exemptions (executive, administrative and professional). We want to pay these people hourly, rather than on a salary basis, because sometimes they perform work that would be considered nonexempt. Can we do this?

A. There is nothing that prohibits you from paying employees an hourly wage to perform duties that are primarily exempt duties. The problem is that if you do so, then they become nonexempt employees. If they work overtime, you must pay them time and one-half their regular rate. (There are some limited exceptions to this rule, but most exemptions for white-collar positions require workers to be paid on a salary basis as well as perform exempt duties.) Therefore, you will need to track their hours worked.

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