© 2024 Seyfarth Shaw LLP | www.seyfarth.com Classification Guidebook | 61 Legal and Budgetary Factors to Keep in Mind Legal risks arising from changes in response to the new rule may result from, among other things: 1. Exempt employees whose salary is raised in order to maintain exempt classification, but who think they should be reclassified as non-exempt/overtime-eligible. 2. Reclassified employees who question why they were not classified as non-exempt, and paid overtime, all along. 3. Reclassified employees who think they were unfairly “demoted.” 4. Reclassified employees who allege off-the-clock work, missed meal/rest breaks, or improperly calculated overtime pay as a result of not changing their daily work habits and practices from when they were classified as exempt. 5. Exempt employees whose pay is not raised, but who think it should be. Budgetary factors include considerations such as: 1. Reclassifying employees as salaried non-exempt requires budgeting for a fluctuating workweek and overtime. 2. Reclassifying employees as hourly non-exempt requires budgeting for overtime. 3. Reclassifying employees as non-exempt may require more payroll software to align with time and pay keeping requirements. 4. Reclassifying employees as non-exempt may require additional pay related to state law requirements, such as predictive scheduling and premium pay.
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