© 2024 Seyfarth Shaw LLP | www.seyfarth.com Classification Guidebook | 15 The risk is that this approach could hinder morale by enhancing the employee’s feeling that something has been taken away from her and/or that she has been demoted and “pinned to the clock.” In the example above, if the employee worked the projected 2,000 non-overtime hours but did not work any overtime, then her wages would total $33,680—a steep drop-off from the $40,000 salary she was previously earning. It is only by working the 250 overtime hours, which equates to about $6,315 in overtime pay, that she approaches her old salary. Ultimately, how you decide to pay reclassified employees should be driven by factors and motivations unique to you and your business. The most important thing to recognize is that there are, in fact, a range of options to consider before you make the decision.
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