In California, can a company take you from hourly pay to a flat rate without making it salary?

Question

A friend has a part time job, $10 an hour, 10 hours a week.
Equalling a gross of $400 a month.
The company has decided to pay him a flat rate of $300 a month instead.
Can they do that?
He is not going from employee to contract.

Thank you for your replies.

Zzyzx: Actually it isn't $8 yet, goes up from $7.50 to $8 in 2008.

Thanks everyone, I agree, he is getting reamed. He is looking for other work, now.

Answer 1

This is illegal. There are very specific rules about what qualifies an employee as exempt from overtime (i.e., salaried.) If he is doing the same job that he was doing before, not only are they paying him less but by paying him a flat rate and no OT, they are violating pretty much every wage and hour law there is.

Visit www.dol.com to find a local labor board office. The wage and hour section can give you more info on exempt vs. non-exempt employees and how pay should be handled.

Your friend should find a new job and file a complaint with the labor board to take these scuzzballs down.

Answer 2

Whether or not a job gets paid overtime is under a federal law, the Fair Labors Standards Act(FLSA). Jobs that don't get overtime are considered "exempt" from the FLSA. There are tests to determine which jobs are exempt. Jobs that are primarily supervisory are exempt. The situation that you describe is not that unusual. Some more enlightened companies do things to address the inequity to people in your situtuaton and some don't. Does your company ever dock your pay for being late, taking time off during the day or leaving early? If so you have a case that they are treating you as a nonexempt employee and entilted to overtime. PS the over 110 K doesn't have anything to do with though there are MINIMUM salaries for a job to be considered exempt.

Answer 3

If the company is paying him a flat rate, it sound like they are making him a salaried exempt. In that case the 10 hours a week can not be mandatory, it could be more or less hours at
the same rate of pay. He needs to verify how he is classified.

Answer 4

In any state an employer can pay anyone whatever they wish.

There could be two (or more) reasons management has done this (1) They can get the same amount of work out of him for $100 a month less (2) They are trying to push him out of his part time position.

Suggestion: Move on to greener pastures.

Answer 5

There is probably a website for CA labor law - I think they can do that, but he should walk. Unless they are cutting his hours - why would/should he stay? Usually a flat rate is more, not less. Sounds like they are ether trying to take advantage or get rid of him.

Answer 6

It's legal, as long as he'd being paid the minimum wage for the actual hours worked.

I'd say that they're trying to get him to quit instead of laying him off. If he quits, he loses unemployment benefits, though in his case he may have a justifiable reason for quitting. If they lay him off, he's eligible for unemployment. If he collects unemployment the company's unemployment tax rate will increase so they may be trying to push him to quit in the hope that he won't get unemployment coverage.

Answer 7

Not an attorney but my guess is that an employer can change anything they want if they give the employee/contractor enough notice. As long as there isn't a prevailing contract that prohibits the change.

Answer 8

Not sure, but isn't CA minimum wage $8/hr?

$300/40 = 7.50/hr.

I would tell your friend to get a new job