ForumsLegal and Insurance

I would never change a salaried employee to an hourly one.

Instead, I would go over what I expect out of them and help them to improve their performance.

As a matter of fact, I only pay hourly employees when I have to by law.

Welcome to the community. Assuming you are in the U.S., the major risk in doing what you've suggested is that federal law, not you, decides whether a job is exempt from the Fair Labor Standards Act or not. If you arbitrarily decide that your employees are hourly, and any one of them doesn't like that decision, a simple call to the Department of Labor hotline on their part will prompt a reclassification investigation. In this case, the DoL would likely rule that if they are hourly now, they were hourly all along -- and the givernment will order you to immediately pay them time-and-a-half going back at least two years and possibly three years for all the overtime that each employee claims he or she worked during that period. That could really cost you. The fact that you're considering this suggests that your employees might not be properly classified now from a federal perspective, so you might want to visit with an attorney who specializes in employment law before you do anything else. Best wishes.