Ask the ExpertCategory: QuestionsSalary to hourly
hri_Admin Staff asked 4 years ago

Can an employer change an employee from salary to hourly? How much notice is required? and how is the hourly wage to be calculated? I’m in Alberta.

Tom Moore replied 4 years ago

a change like that first has to have the employees consent or you risk a constructive dismissal

1 Answers
Glenn Demby Staff answered 4 years ago

1. There’s nothing in the ESC to bar you from changing employment from salary to hourly. However:
>There may be something in the employment contract that bans such a change, e.g., a clause making it clear that the employee is and shall have the right to remain on salary.
>To the extent you make the change unilaterally and it results in significant reduction in compensation or other consequences harmful to the employee, he/she may be able to claim constructive dismissal and sue you for significant damages. (This is less of a concern if the employee’s hours and pay won’t change and the wage is just an hourly-based conversion, in which case the employee is essentially already an hourly employee)
2. The contract should specify timelines and procedures for making material changes to the agreement–as this change surely is.
3. Assuming you’re not seeking to cut the employee’s pay and just want to convert his/her 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.
Hope that helps. Glenn