By Nichole Konyndyk, courtesy of HR Collaborative
Have you been paying attention? The new FLSA regulations may be concerning when you consider the impact on the Company and their bottom line. To be classified as “exempt”, employees will have to make at least $47,476 annually, regardless if they meet the other aspects of the duties test. If an employee’s salary is below the threshold, they will have to be reclassified to non-exempt and be paid overtime for hours over 40 worked in the workweek. We see the numbers and we know, without a doubt, the bottom line will be affected.
However, organizations need to be aware that this new regulation impacts more than the bottom line. The way in which employees work is also going to be affected, which consequently could have a negative impact on employee morale and the culture within the organization.
Employees who are reclassified are going to have to adjust to a new work style. Working as an exempt employee usually comes with work place flexibility and the ability to leave early for a child’s ball game, or catch up on emails late at night. Now, employees will have to choose how to handle their workload and time-tracking differently. Will they leave those emails unanswered for that workday? How will they track their time? Will they have to clock out early to catch the ball game and work longer another day that week to get their hours to 40? To some employees this is going to feel like a demotion. They may feel that they are not professionals anymore having to track their time every day and stick to a planned schedule. Some employees may even feel they are not trusted by the organization because their workload is being monitored more closely.
As the preparation for the upcoming changes to the regulations continue, it is important to prepare for the conversations with employees. Let’s look at some options for employers in hopes of keeping employee morale high and the culture intact.
Think alternatives: Consider alternative ideas to help preserve the company’s culture. If flexibility is a big part of the company’s culture, consider different ways to allow flexibility to non-exempt employees. Perhaps employees are allowed to choose a schedule that works best for them, whether that be a 7:00AM to 4:00PM or 9:00AM to 6:00PM. Maybe consider a shortened schedule, allowing the employee to work 4, 8.5 hour days with an early out one day, or 4, 10 hour days with an extra day off. Whatever is decided, be cautious to apply privileges consistently to avoid unintentional discrimination.
Implement an online time tracking system: One way to help employee morale is to implement an online time tracking system so employees can record their time electronically at the end of each day. Being able to punch in and out from their computer or mobile device will feel like less of a change to employees then having to punch in and out from the clock in the breakroom or manually on a form.
Meet with each employee: Managers should meet with each reclassified employee privately and explain clearly the regulations and the changes being made. Managers should be sure to mention this is not a demotion and does not change their job description, stature or the value of the employee to the organization.
Communicate and reinforce the positives: The new regulations are not all bad! Yes, reclassified employees are going to have to understand that they will need to track their time, and take lunch breaks, but employees will also be compensated for the overtime hours they are working. So now they will be compensated for those long days at the office. The work life balance will improve as employees will not be expected to answer emails and phone calls at night during family time. If they do have to answer an email or call, that time will be tracked and compensated. Upper management can help reinforce the idea of work life balance. Since employees may not have as much flexibility as they used to during the day, the time they are off work is encouraged to be time away from work with family and friends and not checking emails.
The upcoming changes are not going to be easy for employers or employees. To help your organization retain those talented employees, be mindful of employee morale and your organization’s culture as you prepare for the new regulations to take effect.
HR Collaborative is a business consulting firm specializing in strategic human resource management. We operate in partnership with our clients and as an extension of their HR department. We help organizations build their HR systems, offering assistance within the broad spectrum of Human Capital Management. Contact: 616.965.7860 or www.hrcollaborative.net.