It is not actually illegal, but it is so difficult to administer on a part time basis, that most employers won’t do it. For example, rather than having you work a certain number of hours per week (which would be illegal if you were salaried) they have to set up an FTE (Full Time Equivalent) for you, such as .75 FTE. It is a really slippery slope to explain why someone who used to be hourly working 30 hours per week is now .75 FTE (the equivalent of 30 hours per week) at the same base rate. The problem is that it just looks like they are trying to avoid paying you for all hours worked, and avoid paying you for overtiime. Ultimately, however, whether a job can be classified as exempt, and therefore be salaried, has everything to do with whether the job duties qualify it as an exempt position or not, and not with how many hours per week the job typically takes to complete. Bottom line for you… it is in your favor to be paid hourly rather than be salaried, because they cannot get free labor from you when you are hourly. I’d accept their response and be grateful they aren’t trying to push you into a salary.