Human Resources, Payroll

DOL Overtime Rule Sparks Difficult Conversations

Well folks, it’s just about that time. The implementation of the DOL Overtime Rule is upon us and if you have not already had a few difficult conversations, you are one of very few affected employers. Guess what? These difficult conversations are not going to stop after December 1, 2016. Going forward you may encounter employees who previously had been assigned as an Overtime-Exempt worker, but will be Overtime-Eligible going  forward. Explaining this may be the difficult conversation I am discussing today.How should an employer handle such conversations? Here are 3 good examples. clock

1.  Productivity Expectations

Do we expect newly overtime-eligible employees to be as productive if we require a 40-hour workweek without overtime?

If your answer is Yes, consider this:

  • Will you be willing to hire some extra help?
  • Are you willing to be lenient and allow them to work some pre-approved overtime? Or will you reduce their load of responsibilities?

No matter how  you slice it, your employee is going to feel like they have received a cut in pay and an unfair increase in your expectations of them. Tread lightly. Listen to their concerns. Speak consolingly – but don’t talk down. Reassure them you value their work and are just as unhappy about these mandatory changes and you do not expect them to work for free.

2.  Drop in Status

In addition to feeling like they  have been demoted, they’ll also be losing salary status. Most people see a “salaried” payment form as a sign of appreciation and trust – RESPECT. They’ve spent years riding a time-clock and now that part is over. They’ve reached a higher level of professionalism.

Unless you’re willing to increase the employees’ salary above the new standard, they’re about to experience a drop in perceived status. It is an employer’s duty to reassure each individual they are not being punished, demoted or losing status. Perhaps you employ the payment method “salaried non-exempt”. This is where a worker receives the same salary as usual, BUT, if they exceed 40 hours in one week overtime is paid. (Some states have more stringent overtime laws. Know your state law.) Under this type of arrangement, the employee may be earning more money than before, but if you control the hours of overtime worked the bottom line may still be less than the new mandatory $913 per week. Do the math first.

3.  Flex Time

Recently, SHRM did a survey that revealed 67% of HR professionals said that if the new rules lead to increases in OT eligibility and OT pay, it’s unlikely that employees will maintain their current levels of flexibility and autonomy.

Employees will start punching time clocks. This means arriving late and leaving early will decrease pay when it has never really mattered before. Show employees the benefits of a structured non-exempt position such as their new structured hours. This means that they are no longer 24/7 workers and can enjoy the freedom to spend more hours with family and non- work activities. Also, since the DOL classifies answering work related emails or phone call after hours as compensable time, employees won’t have to handle those particulars anymore. This will make it easier to balance their home lives with their work lives.

So, explain to your employees that their reclassification is not a bad thing and show them the true benefits. While there will still be an upset, being clear in your explanations, considering fair pay  for the amount of work you  expect and handling these conversations with a little extra TLC will make for an easier transition.

Until Next Time, Be Audit-Secure!

Lisa Smith


Lisa Smith is CEO of Andere Development, LLC and Chief Content Developer at BeAuditSecure.com. Follow her on Twitter, connect with her on LinkedIn, listen to her Small Business Spoonfuls Podcast, and find more from her in Audit-Secure Assistant at BeAuditSecure.com.


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