Can you convert all employees to nonexempt? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Can you convert all employees to nonexempt?

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Q. For years, we’ve always had salaried employees. But we have many employees who always come in late and leave early. This is hard to track. We are thinking of making them hourly employees and getting a time clock. If I make them all hourly employees, I know that I have to pay overtime, but it might be worth it. Can I legally change their status from exempt to hourly, or are some employees required to be salaried? — B.B., New York

A. No law prevents you from converting all of your employees to hourly, nonexempt status. However, on top of the additional overtime costs you’d face, we anticipate that an across-the-board change would create a morale problem, too.

Indeed, many employees are disappointed when they’re converted from salaried to hourly status. Those employees aren’t focused on the overtime dollars. Instead, they view themselves as “professionals” and think of overtime as something for “less valuable” employees. 

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