Q. "Is it OK to reclassify an employee from exempt to non-exempt status?"
Answer:
Yes, it’s possible. Any employee can be re-classified as non-exempt (although we recommend all employees in the same role have the same classification). If you decide to reclassify an exempt employee, be sure not to degrade them or cause them to disengage, as exempt employees sometimes feel a certain “status” in being salaried.
It is important when reclassifying employees from exempt to non-exempt to:
Clearly communicate the change in writing
Make the change effective in payroll and job description
Communicate policies and expectations affected
Ensure managers understand all applicable wage and hour laws impacting non-exempt employees and how they may affect day-to-day work. These may include:
Meal and rest breaks
Properly tracking time
Reporting over time
Implement this change with advance notice to the affected employee(s) and an effective date at the start of a workweek and payroll cycle, allowing time to communicate expectations and train employee(s) on policies. Make sure to get written acknowledgment from the affected employee(s) showing their understanding of the change.
If you are reclassifying the employee because they had been misclassified as exempt, consider consulting an employment attorney first since the employee may previously have missed out on overtime or other benefits.