Dive Brief:
- With the Department of Labor's new FLSA overtime rule lurking around the corner (it could come at any day), a legal expert ponders if employers can classify employees whose compensation falls below the new threshold as non-exempt, while treating those with the same job title but with higher salaries as exempt.
- It's possible, writes William Pokorny, of the law firm Franczek Radelet P.C., at JDSupra. But it also could get very tricky. Employers could find themselves with job classifications where the salary scale straddles the new line between exempt and non-exempt, whatever it turns out to be (estimates range from $45,000 to $50,400, the original Labor Dept. number from last June).
- Pokorny says if an employer splits a job classification into exempt and non-exempt groups, and if the employer consistently pays the exempt group on a salary basis, without improperly docking their salary, it has "effectively created two distinct categories" (one exempt and one non-exempt).
Dive Insight:
He writes that if it's unambiguous, there would seem to be no reason why paying the hourly folks on an hourly basis should jeopardize the exempt status of the exempt group.
He then discusses some of the potential pitfalls of this strategy, but says they are not necessarily deal breakers. For example, he says an employer could create a new classification – something like dividing an “Accountant” title into “Accountant 1” and “Accountant 2,” with the higher-level classification being exempt, and the lower non-exempt. Taking this route could make it more understandable for employees and managers than an arbitrary minimum salary level.
Whatever path an employer adopts, success will depend on good planning and clear communications with all involved, Pokorny writes.
