Hired salary but paid hourly

Question

I got an offer letter and contract from my current employer. The offer letter states "The salary is $115,000 annually, paid monthly."

I am currently working as contract to hire, and I have a 1099.

The first week I worked about 45 hours, the second week around 39, the third week around 60, and the last week around 30. Pretty standard.

My pay should be roughly 115,000/12 = 9583 a month.

For the first 2 months now, I got one check for 7500 and one for around 7800. When I brought up my concerns I was told I don't do 40 hours every week, and they aren't going to pay me salary when I don't put in all the hours.

2 questions,

1. Are they right?
2. If they are wrong, and I think they are, if I continue working there am I agreeing to the changes if they are not written out and signed by both. Do I give up my rights to the proper agreement we had?

Answer 1

The Company is performing wage theft

I have never heard of a wage method that pays a salary according to hours but doens't pay for hours over 40. Monthly Salary, by definition, is paid regardless of hours. Your contract doesn't give hours, it just gives a monthly total. That's a contract, and you should be paid according to the contract. In terms of fairness, it certainly isn't right to dock pay for weeks you worked less than 40 but not give you credit for weeks you wored more than 40.

Now, it's not clear if you moved to direct employment for the second month. If you did, the first month would be a contract violation, and the second would be a violation of wage & labor law. A company can't pay you salary as an exempt (exempt from hourly wage laws, like management) employee and also dock you pay according to hours worked.

So what can you do? If you are still a contractor and actually want the job, not much more than arguing with payroll. Since you (why?) decided to be a contractor instead of a direct hire, you have exactly zero protections to getting let go. If you are a direct employee, you have protections from bringing action about being paid fairly, though your long-term prospects there would be problematic if you have to take the company to task using the government.

Any HR rep should know all of the above. But never just go to HR without talking to your manager first. Remember that HR works for management, and working against your manager is generally a bad career move.