What benefit does the employer get from switching exempt employees to salary if they kept compensation and benefits the same?

My company made a whole people hourly when they qualify for exempt status (yes, even under the new law), so I'm trying to find the bottom line. They did not change gross pay or benefits. What benefit does the employer get from doing that? Is it cheaper to layoff hourly employees or something?

4 Answers

  • Jason
    Lv 4
    4 years ago

    Just to clarify, are you saying that they changed from salary to hourly? The title and the question seem to be at odds.

    It gives them more control and visibility over when people are working, especially if there is some sort of time clock. It's possible that people were taking advantage of the schedule by taking extra-long lunches, for example, and now that their lunches aren't paid anymore (I assume) they can't do that.

    It also provides more flexibility if they do end up having to lower their compensation budget; if tough times are expected then they can cut hours instead of cutting salaries or laying people off. In a way this is better for the employee because I'd much rather be cut back to 7-hr days than keep my schedule and get a 12% pay cut, but it's also better for the company because if they have to do this a lot, or at irregular intervals, it saves paperwork.

  • Anonymous
    4 years ago

    It depends on where you live but, generally speaking, the rules regarding overtime pay are a lot different for a salaried employee vs. an hourly employee. In short, your company is probably trying to shaft its workers to save itself some money.

  • 4 years ago

    The benefit is that they can require them to work more hours and not pay them overtime.

  • 4 years ago

    They can then pay you only for hours worked.

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