If an exempt employee works their regular workweek Mon-Friday, and then comes in on a Sat. and performs a non-exempt job, if we would pay the employee on an hourly basis for that non-exempt work, does it destroy their exempt status for that workweek?

It could and it is risky to do this.  You would have to do a complete job analysis to see how of the exempt work M-F is really exempt.  The rule used to be 80% of the time spent working must be on exempt duties to qualify as exempt.  Now it has been relaxed somwhat by stating that the primary duties of the job are what determine exempt status.  If the employee works in a non-exempt capacity on Saturdays, then the primary duties test is diluted.

As indicated by the previous poster’s response, the answer here in a little more complicated that one might expect.

There is nothing impermissible, per se, with assigning additional duties (including non-exempt duties) to an exempt employee.  It is also OK, generally, to pay an exempt employee extra compensation for additonal duties, as long as the employee is still receiving his or her set salary.

An employer must be careful, however, because the exemption can be lost if an exempt employee performs too much non-exempt work.  The old 80% limitation on non-exempt work no longer applies under federal law.  The issue is whether the employee’s primary duties consist of exempt work… considered all relevant facotrs (frequncy and amount of exempt work vs. non-exempt work, the importance of the exempt work perfromed, etc).  Adding too much non-exempt work into the equation can harm exempt status.  Also note that some states (like Pennsylvania for instance) maintain a limitation on non-exempt work.  So be careful to check state law.

Straying too far from the salary payment can also be risky.  Additional compensation is OK generally speaking but the employer must be sure that the exempt employee’s salary is always paid on a regular basis less only permissible deduction.

If the Saturday work is happening on a regular basis, consider bumping up the weekly salary level, rather than paying “extra” for the Saturday work.  If the work is sporadic, consider paying a lump sum “bonus” for the Saturday work, regardless of the number of hours.  Either would help if you are ever called upon to argue that the Saturday work is exempt.

I agree that the key is whether the employee’s “primary duty” is the performance of clearly exempt work. The current “white collar” exemption regulations (effective since 8-23-04) explain the requirements for the various exemptions that result from FLSA Sections 13(a)(1) and 13(a)(17), and there is a separate section dealing with “primary duty.” These regulations (29 CFR Part 541) are accessible at http://www.wagehour.dol.gov (look for “Fair Pay” and click on “regulations”).

In those regulations DOL makes it clear that the agency does not hold an hourly payment for extra work (whether or not the duties are exempt in nature) to be in conflict with the salary basis test. Perhaps there is case law that has held otherwise, as Kevin is not the first attorney who has recommended avoiding hourly payment. I can assure you, however, that DOL (the enforcement agency) will not raise the method of payment for the extra work as an issue (if an investigator does do that, he or she is simply not well trained and will not be supported by Wage and Hour Division management).

Whether the Saturday work in a nonexempt job will compromise the validity of exempt status is dependant on how solid the exemption classification is in the first place. If it is shaky as to whether the employee’s primary duty is exempt work, then the Saturday hours (if this is repetitive or frequent) might tip the scales toward non-exemption. DOL deals with a similar question in an opinion letter, and, from my recollection of the letter, I believe that my response conforms to the (more detailed) information available there. In summary, I suggest that you examine the strength of the current exemption determination, and if there is no doubt and there is obviously a great deal of “wiggle room” (i.e., much nonexempt work could be done without causing loss of exemption), the Saturday job will not be a problem.