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make any changes to the computer professional exemption (other than the salary
increase, as may be applicable).
Now it is true that some employers say that you cannot afford the extra expense of
paying for overtime. However, there does not need to be an extra expense. The employer just
needs to adjust the employers hourly rate so that the total compensation is what the employer
wants to pay. For example, assume you have an accountant who was making $35,000 a year, and
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the accountant usually worked 50 hours a week. The employer can set the accountants hourly
rate to whatever the employer wants, provided it is at least minimum wage, $7.25 an hour
(except for cities and states which are above the federal minimum wage, then the employer must
meet those minimum wage rates). So if the employer set the accountants pay at $7.25 per hour,
and he works 50 hours a week, he would receive 40 x $7.25, plus 10 x 1.5 x $7.25, which equals
$398.75 a week, which is $28,600 a year. Yes, when converting the employee from exempt to
non-exempt, the employer can pay them less what the employee was making on a salaried basis.
It is worth repeating, the employer can set the workers hourly rate at whatever the employer
wants, as long as it is at least at or above minimum wage.
Now the employer may not want to reduce the accountants pay for moral reasons, or
because of fear the accountant he will be hired away. That is not a problem. The math is simple,
the formula to figure out the new hourly rate to keep the overall pay the same, again assuming
50 hours of work a week, is as follows, Y being the new hourly wage in our example : $35,000 =
52 x (40 x Y, plus 10 x 1.5 x Y). So $35,000 = 52 x 55 x Y. So, $35,000 divided by 2860
equals Y, the new hourly rate, which is $12.24 per hour.
Employers must remember, of course, two basic but critical rules for non-exempt
employees: (1) the employer must accurately record the workers work hours, and (2) the
employer must make sure employees are not working overtime, and not recording the work
hours. Sounds simple, but it does take some effort and diligence to enforce. A mere memo
directing this is not enough. Employers must do sample checks to make sure the rules are being
followed.
Employees will come to the office or shop, work, and work a few minutes before signing
in at their start time. They will take work home and work on it. They will sign out for the day at
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the end of their shift, but then work on a project for half an hour. They will answer work emails
outside of work hours. If the non-exempt employee does not record these hours, then the work
hours are not accurate, and there is potential liability for the employer. It is not enough to tell
employees not to work overtime, if the supervisor knew or should have known, the employee is
in fact working overtime. Employers must have more than just a sign in and sign out sheet.
They need to walk the floor and check emails to make sure unauthorized overtime is not being
worked. Employers need to remind non-exempt workers again and again, that they will be
disciplined, up to termination of employment, if they perform any work of any kind, and do not
record their work hours.
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