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Jan05

Converting Hourly Employee to Salaried

I’m looking for a letter to convert an hourly employee to a salary employee. In his offer letter in May we mentioned he would be hourly with 40 hours a week. Everyone else with his title is salaried and we would like to make him salaried. Please help with sample letter.

It’s difficult to provide a thorough letter without more information. Here’s a basic one:

Dear John Smith,

You were hired as an hourly paid employee scheduled to work 40 hours per week effective (Date of Hire). We’ve since realized that you should’ve been hired as a salaried employee. Thus, effective (Date), you will be changed to salaried receiving (Annual Salary) per year. We apologize for any inconvenience this may cause.

Sincerely,

XYZ Company

There are a few things to point out.

The federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

Under the FLSA, employees are either non-exempt or exempt.

Non-exempt employees must be paid for all hours worked and are subject to overtime and minimum wage requirements prescribed by the FLSA. Conversely, exempt employees receive a fixed predetermined salary and are excluded from overtime pay provisions.

Salary and hourly paid are compensation terms. Though uncommon, a non-exempt employee can be paid a salary each workweek.

It’s important to appropriately classify the employee and clearly inform him of how, if at all, the change affects his work schedule or responsibilities.

Also, even though the offer letter states he’s hourly you as the employer are able to change the terms of the agreement as you deem suitable assuming neither a collective bargaining agreement nor employment contract states otherwise.

Some employees prefer to be salaried while others may feel they’re no longer being paid for all their hard work. So, be prepared for some backlash. Simply explain that the mistake is being corrected to be consistent with company practice and give the employee any information needed to ease the transition.

This entry was posted on Tuesday, January 5th, 2016 at 8:48 pm and is filed under
Compensation.
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