Change Compensation from Salary to Hourly

[Sean Carberry]

#91591

Forum: Private

Hello – I have a client who would like to change an employee’s compensation from salary to hourly. The employee is a floor manager in the retail industry and has been working with the company just under a year. The plan is to calculate the new hourly rate based on annual salary for 40 hours/week, give him a small bump, include his vacation entitlement, and provide 2 months notice for the change to take effect.

The intention is to put it all in writing and secure signoff. Is there something else we need to consider for the change?

Thanks,

Sean

[vickyp]

#91634

It would appear that you have all your bases covered; however, what do you plan to do if the employee doesn’t agree to this change? Is this change required to keep their job? Is there a business reason for making this change?

It could be considered constructive dismissal if the employee has no option but to accept the change; however, the bump is a good mitigation strategy, but it is something to be cautious of.

Ultimately, if the employee signs off and is amenable to the change, you are fairly protected – as you have described it.

HR Insider staff

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