Written by Lisa Porro, PHR & SHRM-CP; HR Consultant – CA; 6/8/16
Based on the FLSA changes to the minimum weekly salary effective December 1st 2016, many current exempt/salaried employees will find themselves converted to non-exempt/hourly employees eligible for overtime. From the outside, some may think that employees will be thrilled with the ability to earn premium pay for over 40 hours a week (and in CA, over 8 hours a day). But for many employees, this won’t be good news. Why?
Many see reaching an exempt position in their chosen industry as a sign of success in a professional career. Seen as no longer being tied to a time clock, those in exempt roles may experience greater flexibility in their hours, the ability to bring work home, travel offsite, managerial duties and certain alternate benefits (increased PTO or vacation time) than their non-exempt colleagues do. It can be a mixed blessing, however, when putting in nights and weekends at work when others are “off” for the day goes unrecognized; with no more pay than if one works only during regular work hours.
How do manager appropriately inform affected employees that they are now non-exempt?
How do you tell affected employees that they will now be required to document their hours worked each day, “punch a clock” and ask for permission before working overtime?
This can be a minefield of hurt feelings, low morale and demotivation from a sense of lost autonomy. But remember, this is NOT and should NOT be classified or referred to as a demotion. Not by the manager and not be the employee.
- State the facts – to all employees. This is simply a new federal regulation and NOT a statement of your employees’ value or the value of their positions to the organization. This should be communicated to all employees so those who will remain exempt will not see their colleagues any differently.
- Make as few changes as possible. Employees who approved subordinates’ time before December 1st can still do so. They can still take part in the monthly manager meeting and participate in coffee runs. Titles and responsibilities can remain the same, even if they need to take a closer look at the WAY they approach work, and how they document their hours.
- Highlight the positive. If the requirements of the position put the employee over the standard hours of the workweek on a regular basis, will there be overtime can an employee work (keeping salary budgets in mind) without needing additional approval? Explain that those “extra” hours will now be both documented and paid – at a premium! The new classification, especially in some states, means that they also entitled to take, and document, lunch breaks– which they may have felt pressured to skip in the past.
- Consider “grandfathering” exempt-only perks. Have some benefits traditionally been given to only exempt employees in the past, such as the ability to work from home one day a week? While it may be a challenge to continue to allow it for your newly minted non-exempts, your employees will appreciate being able to hold on to what they feel they have earned, even if it comes with more stringent record-keeping requirements.
While working with your employees prior to the classification change, be sure to also ask them about any concerns they may have. Stay true to the Open Door policy that should be in your Employee Handbook.
Employees may be well aware of job-related challenges with this new classification that you haven’t yet considered – such as a dotted-line manager who is inclined to drop off urgent work to be done at the end of the workday or sends emails late at night expecting an immediate response – and may have innovative ideas on how to resolve any potential issues.
No one knows the job better than those who are currently doing it. Maintaining your open-door policy will ensure that your employees know that while there may be adjustments to their hours and how they approach their workdays that the relationship with their managers, and importance to the company, remain the same.