Exempt to Nonexempt—7 Steps for Communicating the Transition

In yesterday’s Advisor, BLR^® Legal Editor Susan Prince, JD, MSL, outlined some common concerns employees may have when they are transitioned from exempt to nonexempt in the wake of new overtime regulations. Today, Prince provides seven steps for effectively communicating this transition to employees.

7 Communication Steps for Employers

In order to minimize morale issues in your company and to avoid paying overtime for time worked that you did not approve, it is important to set the standards for newly nonexempt employees in a way that they understand and accept without feeling they have been demoted or punished.

1. Train your managers. It is important that supervisors and managers take the time and make a concerted effort to understand and familiarize themselves with the FLSA and its changes. They need to understand why these changes are occurring in the workplace. Supervisors will be on the front line in communicating changes to employees, thereby setting the tone for the changes to come.
2. Explain why the change is taking place. Discuss the fact that these standards are set out by the federal government. It is not based on the discretion of the company, and it is not a reflection of how the company views the employee. It is not a performance issue. If employees understand that these are objective rather than subjective standards, they will likely feel less offended by the change.
3. Pay for every hour worked. This is one of the major benefits of nonexempt status—getting paid for every hour worked above 40 hours each week. Managers need to make sure they communicate this point to newly nonexempt employees. There will be no more endless evenings and weekends of work as an exempt employee, feeling like you are not being adequately compensated. You can now directly tie your pay back to the hours you are working.
4. Explain the new timekeeping procedures. One of the most difficult adjustments for the newly nonexempt employees is being required to track their time down to the minute or few minutes. Employers need to explain that this is the result of federal regulations, and it is not a discretionary company decision. Employers are bound by law to keep track of the time nonexempt employees work.
5. Regular communication. Regular communication will make employees feel that their concerns have been heard. Give employees an opportunity to ask questions, voice their concerns, and have an open dialogue to learn more about the regulatory changes.
6. Appoint someone other than the employee’s manager as a point person for communication. For some people, complaining to a direct manager is very uncomfortable. It is helpful if employees have an outlet for communication that is not responsible for writing their performance reviews. This can be a person in HR, but it should be someone who communicates well and has a good understanding of overtime law and its classifications.
7. Be proactive. It’s difficult to change habits you may have had for years, such as working through lunch, checking work e-mails after work, or taking evening work-related phone calls. Supervisors should make it a point to walk around the facility daily and check time cards to be sure nonexempt employees are not working through meal periods or staying late.

 
Under the de minimis rule, employers may disregard insubstantial or insignificant periods of time beyond the scheduled working hours if, as a practical administrative matter, the time cannot be precisely recorded. But this rule applies only where industrial realities justify the practice, and the periods of time involved are uncertain and amount to a few seconds or minutes.
An employer may not fail to count any part, however small, of the employee’s fixed or regular work time. If habitual “offenders” are logging extra time out of habit, supervisors should speak to them about adjusting their routines. If employees are struggling to meet workload demands, redistribution or rescheduling may be in order. Communication is the key to spotting, understanding, and resolving these problems.

Prepare Now

Create your communication plan now. Who will be the person speaking to employees—their direct manager or some other person in the company? What will this person say and how will he or she represent the changes? Prepare a document that explains the what/why/how/when of the changes to share with affected employees. Be transparent.
Determine which jobs are likely to shift categories under the updated regulations. Pinpoint those employees who are likely to be affected by the changes.
Review your job descriptions now to determine whether they are still accurate, reflect the jobs being performed, and reflect the skills necessary to perform the job. Review employees’ actual job duties to ensure that they still fall within the administrative, executive, professional, computer, or outside sales exemptions.
Then make sure overtime for nonexempt employees has been properly calculated. Conducting a self-audit now will help ensure your company is in compliance with federal and state laws.