FLSA Employee Reclassification and Implementation Plan

Posted by bop-admin on May 25, 2016 11:52:56 PM

FLSA Reclassification - It’s Time for Implementation

Kick off your FLSA Reclassification Project With A Plan
You have been on the ball anticipating the FLSA changes and have identified all the exempt positions that will be affected by the FLSA amendments. Now it’s time to put your plan into action.  December 1, 2016 is the compliance deadline so there is no time to waste. Here are some tips on how to kick off your FLSA Reclassification Project.

Communication is Key

There has been a lot of media coverage on this topic as millions of white collar employees will be affected, so your employees may be aware of this law change.  Meet with the identified employees whose classification needs altering. Inform them that the company is obligated to make the change.  Then, communicate how this will directly affect them. Provide each employee the time to discuss their concerns and questions on these changes.

Knowledge is Power

The daily tracking of time records will affect these employees’ every day life.  Clocking in and out, requiring meal periods, watching overtime hours, etc., will all be different, and a work condition these employees have not been exposed to for quite a long time.  Training for company hourly employee requirements is necessary. Remember to include training for managers that have only been managing exempt employees.  They will need to be trained to monitor and enforce the rules.  Keep in mind that most employees struggle with change.  This change might feel like a demotion or a negative employment action to the employee, so careful and thorough explanation is necessary.  Training for these employees need to include:  hourly schedules,  time tracking, break policies, meal period policies, and overtime policies.

Explain the Math

In addition to the effects this change can have on the employee's daily life, employees may feel that it is also going to affect their pocket book.  Thoroughly explain how you came up with their hourly rate of pay.  You do not want the employees to think their paycheck will decrease.  Show them what their pay stub will look like going forward and on what exact day the change will occur.  Giving the individual advance notice of at least one pay-period or more is advised.

Time Records! Time Records! Time Records!

Due to the quick compliance timeline laid out by the amendments, there may be a spike of wage and hour lawsuits on the horizon.  HR should have completed an analysis of the company’s processes and tools available for capturing and tracking hourly employees’ time.  If time records are not being kept properly, a plan should be immediately in effect to correct such issues.

What else will be affected?

HR will need to revisit other company policies that these changes could impact.  For example, telecommuting policies may need revision so the company can better manage the tracking of time for these affected employees.

Positive Takeaways

HR departments are facing new burdens to comply with the new FLSA changes, but consider some of the following while performing audits to get the most out of the time and effort.

Properly classifying exempt vs. non-exempt employees.  This can lead to improved alignment between real duties, pay, and overtime policies that may have drifted apart over time. A good analysis should review the duties being performed actual the actual number of hours being spent on each task.  This may justify additional headcount that can be paid at a lower, regular rate.

Labor realignment could result in lower costs. Because labor costs are typically the largest operational expense for any organization, this review is an opportunity to create workforce optimization that lead to better budgeting and lower costs for certain positions.

Higher level of engagement. Workers who are currently working overtime and not getting compensated for it may display a higher level of engagement once they feel they are getting paid fairly for their time.

HR can lead reform of workforce strategy.  With the results of the audit and budget implications, it is possible to provide analysis to suggest alternatives to paying overtime by incorporating a mix of new hires, retraining, succession planning, and part-time and seasonal workers to fill spikes in demand.

Topics: Wage and Hour, Compliance, Labor Laws