Benefits and Compensation, HR Management & Compliance

7 Steps for Communicating Employee Transitions from Exempt to Nonexempt

By BLR Legal Editor Susan Prince, JD

With the release of the Department of Labor’s (DOL) final overtime regulations, not only will employers and human resources (HR) professionals be dealing with the dollars and cents of shifting numerous employees from the exempt to nonexempt categories under the Fair Labor Standards Act (FLSA), but they will be tasked with bolstering employee morale and handling various emotions about the changes.

Employees have a variety of concerns over the new standards for exemption. Below we will touch on a few of them.

Is this a demotion? Some formerly exempt salaried workers may feel that their new nonexempt status is a “demotion.” HR and direct managers should reiterate explanations that the new status refers only to the way their pay is calculated, not to their relative position in the department or company.

Habits are hard to change. Other newly nonexempt employees may find it hard to adjust their work routines and continue to work through lunch or stay late. Supervisors must be aware of their employees’ work habits in order to avoid unanticipated increases in departmental wage costs. Nonexempt employees must be paid for all time worked, whether or not the supervisor specifically authorized the time.

Will I still be able to advance my career? Newly nonexempt employees may fear that career advancement opportunities will be less available to them. Achieving a promotion from a nonexempt position into an exempt position can be difficult in many companies, therefore some employees may feel at their career path might be blocked by this change in status.

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