Employers adapting to the new regulations under the Fair Labor Standards Act (FLSA), effective December 1, 2016, are increasingly turning to the Salaried, Nonexempt designation in order to save costs by paying half-time instead of time-and-a-half overtime.
The Salaried, Nonexempt designation has several requirements. The employee must work a fluctuating work week (the numbers of hours worked in a week regularly changes), and be paid a fixed salary regardless of nearly any circumstances. The base hourly rate is then calculated each week, changing with the fluctuating hours worked. Hours worked over 40 in that week are then paid at an additional half-time.
The Salaried, Nonexempt designation is tricky, but can be quite useful to employers look to save money. Competent employment counsel should be consulted before utilizing it.