Posted in Blog | Compliance

Navigating the New Overtime Rules

As we saw in our last post, The Department of Labor’s overtime requirements will change January 1, 2020. Employees whose annual salary falls between the old level of $23,660 and the new threshold of $35,568 per year, will need to either be reclassified as non-exempt or given salary adjustments to meet the new guidelines.

If you are choosing to reclassify employees, here are a few important items that you want to be sure not to overlook:  

Be aware of any requirements for advance notice of reclassification that apply to your organization.

Since your policies for Exempt and Nonexempt employees are likely different, take time to review any changes to benefit packages or time off policies that will be necessitated by a reclassification.

If the employee is being reclassified or duties are being shifted in order to control overtime costs, it is important to examine and adjust the employee job description as necessary.

A reclassification will require employers to track the worked hours of these newly non-exempt employees. Since they are not used to tracking their time, employees may need to be oriented with the processes and requirements for recording their time. 

Communicate, Communicate, Communicate

The key to navigating this change is communication. If you are going to change an employee’s status, workload or pay structure, take the time to communicate what is happening and why. Help them understand how this change impacts them on a day-to-day basis. The longer they have been in a salaried position, the more important it is to be clear about your expectations moving forward.

For instance, clearly communicate the expectations regarding worked time. Remember, these employees are used to working as many hours as necessary to get the job done. Will that change now? For some, emails, phone calls and catch-up work after hours is the norm. How should they handle those moving forward? How will this impact the employee who works remotely? If she currently slip out for doctor’s appointments or school activities, will she still be able to do so? Are there guidelines and policies he will be required to follow for working more than 40 hours in a week? These types of issues can create big problems down the road, so it is best to be clear about them in the beginning.

Finally, be mindful that this change may be viewed negatively by your employees. While some may see this as a welcome change, others may view it as demeaning, interpret the sudden requirement to track their time as a lack of trust, or consider this change a demotion. So think carefully about how you will communicate the change. You may see it as a business decision made purely by the numbers, but if poorly communicated, it could, and probably will be perceived as a personal slight.

As you get ready for this important change it might be a good time to evaluate your time keeping processes and tools. We’d love to talk to you about how we can help you address the workforce management issues your organization is facing. 

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for legal advice. If you have any legal questions regarding this content or related issues, then you should consult with a labor attorney for advice.

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