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Can a part-time employee be exempt?

Yes, a part-time employee may be classified as exempt. The minimum salary and duties requirements must still be met, of course. And the minimum salary cannot be prorated when an exempt employee works part-time. In other words, the federal requirement to pay $684 per week (or the higher state minimum salary) will apply even if the person is working less than full time.

That said, “part-time” and “exempt” usually don’t go well together. The point of classifying an employee as exempt—from the employer’s perspective—is that the employee can be paid a set salary and asked to work extra hours without being entitled to overtime pay. But employees who are hired into part-time roles often seek them because they have other obligations (or even other jobs). They generally expect to work an exact number of hours each week or at least keep to part-time hours.

While the nature of exempt status is that employees can be expected to work the number of hours necessary to get the job done, if the job is actually a full-time job, it should be classified as such. If you start to lean heavily on your ability to require an exempt part-time employee to work extra hours without extra pay, potentially upending other plans, morale is likely to suffer. However, you can mitigate this by being clear upfront about what kind of commitment may be required and by advertising and describing the job accurately. Additionally, referring to a part-time exempt employee as 50% FTE (rather than telling them they’ll be working 20 hours weekly) can help establish an expectation that salary isn’t linked to an exact number of hours.

If a part-time employee’s hours will fluctuate dramatically, you should carefully consider whether “exempt” is the right classification. If you reclassify an employee as nonexempt, they must be paid overtime where applicable.

Contact Clergy Financial Resources to help you with the next steps.

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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (763) 425-8778 
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com

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