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The Government Changed Overtime Laws: How to Inform Your Employees

Posted on May 23rd, 2016 Read time: 2 minutes

After the new overtime laws go into effect on December 1, 2016, you may have to notify your exempt workers that their salaries don’t meet the new federal threshold of $47,476 for remaining exempt. Your now-exempt workers will have to start tracking their start times, break times, and end times. Since this will be a change for your current exempt employees, follow these simple guidelines when discussing your company’s policy changes and how your workers can benefit.

  • Potential Employee Reactions

Employees may feel upset and under-appreciated when the new rules go into effect. Many workers place a premium on the prestige of being considered exempt or salaried employees. They may feel like they’re being demoted to a lower position, even if their job title and responsibilities remain the same. Many will perceive the cultural change as a step back in their career growth. 

  • Potential Employee Benefit Changes

If you have different levels of benefits for exempt and nonexempt employees, you’ll have to communicate the differences if a worker’s exemption changes. PTO, vacation accrual, and long-term disability or life insurance coverage may be lowered for exempt workers or go to a nonexempt position. Workers adversely affected will have the biggest impact with these changes.

  • Discussion of Changes

You have until December 1, 2016, to talk with your employees about who is affected by the law changes. Now is the perfect time for bringing up the topic. Reduce the element of surprise by sharing what will happen and why. Help your workers understand that the rule changes are not a reflection of their performance. 

  • Highlighting Positive Effects

Point out the positive effects of the law change. For example, previously exempt workers will be paid for after-hours work. Workers can remain salaried rather than become hourly; if they work over 40 hours weekly, they must be paid overtime based on the per-hour rate of their annual salary. Workers will then increase their take-home pay without changing the amount of work they complete.

Reclassified workers will have their work hours redefined. If an employee needs to stay late for a specific task or meeting, he can adjust his time on a different day that week. Having a more flexible schedule should be viewed as a benefit to your workers. 

  • Potential Adverse Effects

Reclassified salaried workers may no longer be allowed to take home company phones and laptops to prevent working after hours and earning OT. If managers continue emailing after hours and expecting timely responses, your company must be prepared to pay OT or have managers expect a longer response time.

Supervisors must also evaluate whether deadlines and productivity will suffer if employees don’t work OT. Priorities, tasks, and responsibilities will need shifting, having a direct impact on output. Your company needs to continue operating efficiently and cost-effectively. Employee morale must be maintained as well, since it impacts every area of your organization.

Talking about OT law changes is stressful enough. Let us ease your burden by taking on all your back-office responsibilities. Reach out to the expert staff at Innovative Employee Solutions today!

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