Can we change an employee from salary to hourly? If so, how do we calculate the hourly wage?
There’s nothing in your province’s employment standards law (in this case, Alberta) banning an employer from changing employment from salary to hourly. But there are 2 things to keep in mind:
- There may be something in the employee’s contract that requires you to pay on a salary basis and not convert to wages; and
- If you make the change unilaterally and it results in a pay cut, the employee could claim constructive dismissal; this is less of a concern if the employee’s work hours and pay remain roughly the same.
Assuming you’re not seeking to cut the employee’s pay and just want to convert the salary to the equivalent hourly rate, i.e., you’d simply divide the annual salary by the number of normal hours worked in a year.