In exactly three months, the Department of Labor’s new overtime rules
will go into effect and impact nearly 64% of all employees. With
the new mandate come changes to how employees will be classified.
Employees who will be transitioned from an exempt to non-exempt
classification may resent the change in classification. They may feel
that tracking time is beneath them, that they’re being micromanaged,
that their position has less prestige or that their work has less value.
All of this is understandable; being exempt has become a kind of status
symbol. But with the doubling of the minimum salary threshold, it will
benefit us all to adjust our mindsets.
It’s important to remember that exemptions to the FLSA’s minimum wage
and overtime requirements were made as a benefit to employers, not as a
reward to recognize employees for their achievements. Being exempt
certainly has its conveniences for employees: they usually don’t need to
track their hours, they generally have more flexibility, and they’re
paid the same regardless of the quantity or quality of their work. But
it also has a major drawback: exempt employees aren’t eligible for
overtime pay when they work over 40 hours in a workweek.
When you communicate with employees about the transition to non-exempt
status, be clear that the change has nothing to do with their
performance or their importance to the company. Rather, it has
everything to do with complying with the new overtime rules. The
classification change is not personal, and likely impacts a number of
employees in the workplace. You might also take this opportunity to
praise their work and tell them you value and appreciate what they bring
to the organization. Give specifics. These employees may feel down about
themselves. You can help by building them up.
But your words may sound hollow if your business culture puts exempt
employees on a higher pedestal. It’s one thing to recognize the merit of
individual exempt employees. It’s another to imply that exempt status
itself signifies greater value. Becoming exempt isn’t like becoming
partner in a law firm or receiving tenure at a university. When an
employee receives a raise or a promotion and thereby becomes exempt,
focus on the job well done or on the new duties—these are the things
Finally, if you allow your exempt employees flexibility with their
schedules, allow the same for the non-exempt employees when possible.
Time tracking doesn’t have to mean rigid schedules or micro-managing,
and for those who have been reclassified because of the new rules,
maintaining a perk like scheduling flexibility can help keep morale
How you communicate changes with your employees will have a tremendous
impact on morale and engagement. Let Paycor help you prepare for the
challenging conversations and concerns that will result from this new
law. Download our Employer Conversation
for suggestions on how you can make this transition easier for both
managers and employees. And as always, contact
to help you prepare for the December 1 deadline.
Source: HR Support Center
Subscribe to Our Resource Center Digest
Enter your email below to receive a weekly recap of the latest articles
from Paycor’s Resource Center.
MktoForms2.loadForm("//app-ab01.marketo.com", "003-JWW-697", 1796);
Check your inbox
for an email confirming your subscription. Enjoy!