Q. We are hiring for a new position that does not meet any exemption under the Fair Labor Standards Act (). However, we think there will be more interest in the job if we pay a salary. Can we still compensate on a salary basis even if the position is nonexempt?
A. You can pay a nonexempt employee a salary, but that doesn’t change the fact that you have to comply with minimum wage and overtime requirements.
An important step is to calculate the employee’s regular rate of pay. In general, this means you would have to come to an understanding with the employee that the salary covers a fixed number of hours in each workweek.
There are myriad other issues to consider, such as how to compensate employees for hours worked over the agreed upon number but under 40 hours, whether deductions are ever permissible if the employee works fewer than the number of agreed upon hours and how to reconcile the employee’s overtime with.
But always keep in mind that, just because you pay a salary, a position does not become exempt. You must continue to comply with FLSA and state wage-and-hour requirements.
Seek an attorney to assist you with FLSA compliance in this situation.
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