When employers evaluate their pay practices, there are times when paying a nonexempt classified employee a salary may be considered. Under the Fair Labor Standards Act (FLSA), employers are allowed to pay nonexempt employees a salary, if that salary is sufficient to provide employees at least the minimum wage for all hours worked and only if overtime is still paid for all hours worked over 40 in a workweek.
Some employees who have traditionally been paid on a salary basis and are reclassified as nonexempt may not be overly excited about being paid by the hour. Some employees paid on a salary basis, rather than an hourly basis, may feel that is a reflection of their status, especially if there are benefits tied to being salaried, such as more vacation days and flexibility. Requiring employees to begin tracking their time can seem like a demotion and a restriction on the flexibility they once enjoyed.
To counteract some of this negative perception, some employers opt to implement a "nonexempt salaried" approach. Organizations utilizing this method will pay the hourly nonexempt employees a regular weekly salary much like they were paid when they were "exempt salaried." This salary does not need to meet the salary amount as required for exempt employees but must equal at least minimum wage for all hours worked plus overtime at 1.5 times their regular hourly rate of pay for all hours worked over 40 in a workweek. There are pros and cons for both the employee and employer with this approach...
