on December 21, 2016 Common Questions

FLSA: Can You Reclassify Employees?

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The short answer is yes. All employees may be classified as non-exempt. Being classified as non-exempt is considered a benefit to the employee, while being classified as exempt is considered a benefit to the employer. The Department of Labor is fine with any and all employees being classified as non-exempt.

A piggy bank filled with $100 bills

That said, when making classification changes, keep in mind that similarly-situated employees should generally be classified the same way. It could be seen as discriminatory if Jr. Accountant John is classified as salaried exempt, giving him more flexibility and a pay increase, while Jr. Accountant Maria is reclassified as hourly non-exempt. If you’re going to split up a group of employees like this, you’ll want to make sure that you have legitimate business reasons for your decision, and that you’ve documented those reasons in your employees’ files.