It is legal to reclassify employees as non-exempt and reduce base salary to cover the cost of overtime pay.

Question

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According to the Fair Labor Standards Act (FLSA), non-exempt employees must be paid overtime for any hours worked over 40 in a workweek. Employers may choose to reclassify formerly exempt employees as non-exempt to comply with this law and reduce their base salary to cover the cost of overtime pay. However, this must be done in accordance with FLSA regulations and should be reviewed by legal counsel to ensure compliance.

It Is Legal to Reclassify Employees as Non-Exempt and Reduce