Many people view transfer from an hourly position to a salaried position as a major step forward in their careers, and for many it is. Others, however, are unpleasantly surprised to see their pay dramatically reduced despite the fact they are working the same if not more hours than previously. The answer lies in the exemptions to overtime laws that exist in the Fair Labor Standards Act (FLSA).
Specifically, the FLSA directs that employers need not pay overtime rates to several types of exempt workers, provided those workers receive a salary of at least $455 per week regardless of the actual hours worked:
Some other classes of employees are exempt as well, and New Jersey has adopted the same exemptions. This means that an hourly employee who customarily works in excess of 40 hours a week may earn significantly less as a salaried employee.
Unfortunately, for this reason employers regularly abuse these rules — most frequently the administrative exemption — by broadly classifying employees as exempt when they should not be and then requiring them to work overtime. If your employer has recently reclassified you as an FLSA-exempt employee and you have seen a drop in pay as a result, a New Jersey wage and hour lawyer can analyze your job description to determine if your classification is appropriate.