It would be nice and much easier to run payroll that way.  After all paying everyone for the 40 hours each week makes running payroll quick.  The Department of Labor (DOL) had other ideas.

How can you determine if a position is to be hourly or salaried?

First a quick review of the language.  Hourly employees are non-exempt, meaning they are eligible for overtime.  Salaried employees are exempt, meaning not eligible for overtime.

• Don’t base it on title.  To start making a determination is important to NOT look at title. The DOL always looks at responsibilities. This is the one place where titles don’t matter.
• It’s a test.  Not the kind you get graded on yet there are lots of questions to determine if a position is salaried/exempt. Starting with the type of position it is. Determine if the position fits into one of 5 exempt categories – executive,  administrative, sales, technical, and professional. The titles can be deceiving, look at the definition.
• Drill down.  Each category has a definition and further requirements. Be honest in what the person does and their responsibilities.
• Make a determination.  It may not always be clear once your done, get help if needed.  
• What if I have to change a person’s status?  This can be difficult cornering on which way you have to change it. Many times changing a person from hourly to salary is easier,  it’s going the other way that can be difficult.

Even here you have options.

• Change their responsibilities.  Train them in the assists they are missing to keep them salaried.
• Have the talk.  No not that one.  Be honest in went you have to change them.  If you want, tell them you will guarantee the 40 hours and pay any overtime.

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