on December 21, 2016 Common Questions

FLSA: Can You Reclassify Employees?

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.

Paul Hardin

Paul Hardin is President of Moulton & Hardin, Inc. As an expert in both Employee Benefits and Workforce Management, Paul studies the relationship between all aspects of Human Capital Management, with an emphasis on Benefits Management, ACA, and how an HCM platform is invaluable for employers.

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