Can Non-Exempt Employee Work Hours Be Cut?

When business slumps and revenue shrinks, cutting employee costs is a standard solution. Legally, your options vary depending on whether the employees are exempt from minimum wage requirements. You can legally cut the hours of non-exempt employees, but it's important to do it carefully.


You can cut non-exempt employee hours, though you may have to give them advance notice first. If you only cut hours for some employees, you need objective reasons for selecting the people who are affected. Otherwise, you could be accused of discrimination.

Exempt and Non-Exempt Employees

"Exempt" and "non-exempt" refer to the rules of the Fair Labor Standards Act (FLSA), according to the Department of Labor (DOL) The FLSA sets the rules for overtime pay and minimum wage but exempts some employees, such as salaried professionals and executives. If you pay a department head an annual salary and meet other FLSA conditions, the employee can put in a 50-hour week and not earn overtime.

Non-exempt workers are paid hourly or weekly. Salesclerks, waitstaff and most blue-collar workers are non-exempt, and therefore entitled to overtime. Treating non-exempt employees as exempt to avoid paying overtime is illegal, although many employers have tried it.

Reduction in Working Hours: Employment Law

If you're staring at a tight budget for the coming months, cutting non-exempt employee hours or reducing their wages is one way to trim expenses. The DOL says you can't cut their pay below the minimum hourly wage, but you're free to cut the number of hours they work. You can't skip or postpone payday, though, and you can't stop paying overtime to anyone who earns it.

Cutting the hours of exempt employees is another story. Exempt employees aren't paid overtime, but they aren't paid a lower salary when they work fewer than 40 hours a week. If they're willing and able to work, they must be paid, even if you tell them to stay home all week.

If exempt employees makes a voluntary decision to furlough themselves for a day or two, you can cut their pay accordingly. The DOL says this has to be entirely voluntary on the employees' part.

If you put your non-exempt employees on call so that they're available if you need them, be careful. If you require them to stay on the premises or nearby when they're on call, they might be entitled to be paid for the time.

Give Warning First

Although a reduction in working hours is acceptable in employment law, it's a mistake to start cutting hours at work without notice. The National Federation of Independent Business says there are several land mines you need to avoid when you cut hours:

  • Laws in many states say you need to give your workers notice before a pay cut. For example, North Carolina's Department of Labor says employers must give workers at least 24 hours warning before any changes that lower their wages. If your state's laws say "reasonable notice" or the like, provide as much notice as possible.
  • If your employees are unionized, you're bound by any collective bargaining agreements you made. Talk to the union before you make any cuts.
  • Targeting women or minorities for cuts is discriminatory; even looking like you're discriminating could land you in trouble. If you can't apply cuts evenly across the board, make sure you have objective criteria for deciding which exempt employee hours are cut. If anyone sues, the documentation shows you imposed the cuts without bias.