Moving from hourly to salary means paying a fixed amount per week or year instead of per hour. It does not, by itself, remove overtime: that depends on whether the job is exempt.
| Outcome | Overtime? | When it fits |
|---|---|---|
| Salaried exempt | No | Salary and duties both meet an exemption |
| Salaried non-exempt | Yes, still owed | Steady pay is wanted, but duties do not meet an exemption |
| Stay hourly | Yes | Hours vary a lot, or the role is mostly hands-on work |
Before converting, compare the role with exempt vs. non-exempt rules and your state’s salary level.
To total hours with breaks and overtime, use our time card calculator.
A warehouse shift supervisor earns $22 an hour and averages 46 hours a week. Her weekly pay: 40 times $22, plus 6 overtime hours at $33, is $880 plus $198, or $1,078.
She is offered a promotion to salaried exempt at $1,000 a week, described as a step up. Two problems. First, she would earn $78 a week less for the same hours. Second, most of her day is running a forklift and picking alongside her crew; directing the team is a small part. Her duties may not meet the executive exemption, which would make her salaried non-exempt and still owed overtime.
The company redesigns the offer: $1,150 a week as a salaried non-exempt supervisor for 40 hours, with overtime for hours above 40, and a review of exempt status if the role changes to mostly managing. Her pay rises, and the company does not create a classification problem.
A pay change is personal, and a conversion is easy to misunderstand. Put the details in writing: the new pay amount and how often it is paid, whether overtime still applies, what happens in a week with fewer or more hours, how time off is handled, and the effective date. Compare the new pay with the employee’s actual average pay over recent months, not their base rate.
If the role is salaried non-exempt, explain that hours are still tracked and overtime is still paid. Many employees assume salary means no more clocking in, which leads to unrecorded hours and back pay claims.
A dental office moves its office manager from $26 an hour to a salaried non-exempt $1,040 a week for 40 hours, because the owner wants steadier pay for her. The office manager stops clocking in, thinking it no longer matters.
In a busy month she works 4 extra hours a week that are not recorded. The owner notices, explains that overtime is still owed, and pays the 16 hours at the overtime rate, 16 times $39, or $624. She resumes clocking in, and the office reviews her hours every pay period.
Salaried non-exempt employees do. Exempt employees do not, but only if both the salary and the duties requirements are met.
A simple starting point is the hourly rate times usual weekly hours, including overtime if the employee regularly works it, then decide on exempt or non-exempt status separately.
Generally yes, going forward, with notice. The classification has to be correct for the actual duties and pay.
It depends. Salary gives steady pay; hourly pays for every hour worked. For someone who works a lot of overtime, a salary can mean less money.
Yes, they should. Their hours must be recorded because they are owed overtime for hours over 40 in a workweek.
Generally yes, with notice and without reducing pay for work already done. Explain the change in writing.
Approved hours, breaks and missed-punch corrections come together in signed reports, ready to export to PDF or Excel.