In NJ; if an exempt employee is paid a salary based on a 40 hour week;and it were to change without choice to the same pay at a rate of 32.5 hours:

1. Would it be legal to reduce the rate of pay to 32.5 hours?
2. Would this action make the exempt employee, non-exempt; and entitled to overtime pay?
3. Is it legal to reduce rate of pay to 32.5 hours per week but still require work in excess of 32.5 hours or even over 40 hours?

Thanks for whatever help you can provide.

I'm tired of watching someone I care about being taken advantage of all the time.
:)

An exempt employee is paid a salary, period. Not a salary based on 40 hours or 32 hours or 100 hours.


Now, having said that, there have been a lot of discussions about whether reducing the salary pro rata to a reduction in hours jeopardizes the exempt status of the employee. Here's a good discussion from another board:

http://www.felhaber.com/ARTICLES/090310_PTO.html


In addressing the difference between an involuntary deduction from pay and a permissible fixed reduction in salary, the DOL clarified that an employer may make a fixed reduction in salary during the period of time when the company operates a shortened work week due to economic conditions. For example, an employer could prospectively tell an entire department that the employees will work a four day work week with an accompanying reduction in salary. This would be considered a bona fide reduction not designed to circumvent the salary basis payment. The salary exemption would remain in effect as long as the employee receives the minimum salary each week ($455.00) and met all the other requirements for the exemption.
In order to use this method of salary reduction and to maintain the exemption, an employer cannot make an ad-hoc decision each week to reduce the workweek with an accompanying reduction in salary. Instead, to lawfully reduce both salary and work hours, the employer must make a strategic and more long-term decision to reduce the scheduled workweek to address a predicted period of declining business. In the absence of such a decision, the DOL could conclude that the weekly salary reduction is nothing more than an attempt to avoid the salary-basis test and send people home without pay and the employer could lose the exemption

So, generally speaking, yes, no, and yes.

Yes, there has been a lot of discussion.

Agree with Patty's answers.