Sample letter for FLSA exemption change

When it is determined that a job's exemption status should be modified in order to comply with FLSA regulations, the employer should communicate the change to the affected employee in person. The following sample letter, which involves a change from exempt to nonexempt status, can be used to supplement the discussion with the employee.

Date: [Date]

To: [Employee Name]

From: [Human Resource Services]

RE: FLSA Exemption Change

Dear [Employee Name]:

[Company Name] has recently completed a review of jobs within the organization in relation to our overtime pay policy. As a result of this review, it has been determined that the classification for your job, [Job Title], will be changing from exempt to nonexempt, effective [Date].

This means that you will now be eligible to receive overtime pay for all hours worked over 40 in a workweek. Overtime hours will be paid at a premium rate, computed as 1.5 times your regular rate of pay. Be aware that you must get approval from your manager prior to working any overtime hours.

Your base pay, based on a 40-hour workweek, will remain the same. Your current rate of [$27,040] per year is equivalent to [$13.00] per hour ([$27,040] / 52 weeks per year / 40 hours per week). Based on this regular rate, you will be compensated at [$19.50] per hour ([$13.00] x 1.5) for any overtime hours worked.

[Substitute appropriate wage rates above.]

This change will not impact your job responsibilities, benefits, work hours or pay schedule. You will, however, be required to document the hours that you work, and your manager will explain this process to you. Also, as applicable to all employees, human resource programs may be modified in the future as conditions warrant.

Please note that the determination of whether a job is exempt (not eligible for overtime pay) or nonexempt (eligible for overtime pay) is not based on job title or performance level, and should not be construed as a change in your status within the organization. Instead, the classification is based on a strict assessment of unique job duties and compensation in relation to regulations issued by the federal government.

If you have any questions, please speak with your manager, or feel free to contact me at [Telephone Number] or [E-mail Address].

Sincerely,

[Contact Name]

[Job Title]

By signing and dating below, you acknowledge the changes set forth above. Please return a signed copy of this letter to [Human Resource Services] by [Date].

Employee Signature:

Date:

HR Representative Signature:

Date: