July 2016
Welcome to the July edition of the HR Advisor Newsletter. This month we look at working with employees’ summer schedules and creating a business culture that equally values the work of both exempt and non-exempt employees. We also continue to touch on the upcoming FLSA white collar exemption changes.
HR Alerts
A number of state employment laws are going into effect on July 1, including several state minimum wage increases. If you aren’t signed up for our e-alerts about state law changes, you can check the State Laws section of the HR Support Center and the Minimum Wage Map to verify that you have the latest information and to sign up for future alerts.
Working With Summer Scheduling Challenges
With summer underway employees have more scheduling challenges than usual. Vacations, summertime child care concerns, and the desire to take advantage of nice weather with an afternoon (or day) off all contribute to employees missing more work in the summer months.
How you respond to these matters will of course be heavily dependent on the nature of your business, but consider making allowances when you can. Working with employees to create a schedule that will allow the necessary work to get done, while recognizing that they have obligations and interests outside of work, will help employees feel valued as individuals. This makes for a happier, healthier, and more productive workforce overall. Below are a few offerings you might consider.
Flexible Scheduling
Many jobs don’t allow for flexible work schedules, but if you’re able to let your employees modify their schedules ahead of time – or even last minute (when necessary for them and possible for you) – you’ll generally receive some benefit in return, like increased loyalty and willingness to go the extra step next time it’s needed. With proper planning and execution, employees will still be able to get their work done, and with time set aside in advance for their outside activities and responsibilities, they’ll be able to better focus on the tasks at hand when they do sit down to work.
Telecommuting
If the proper tools are available, telecommuting may enable an employee to get the day’s work done while out of the office. This may be especially helpful when an employee has a child who needs the presence of an adult, but not their full attention, or when they’re riding along as a passenger on a long road trip. If employees are able to get their work done remotely, they won’t have to take paid time off and you won’t have to suffer the loss of productivity.
Reduced Hours
Sometimes creative scheduling and telecommuting just won’t work for the employee or the employer. In this case, you might look at reduced hours for a period of time, or even a personal leave of absence. This is obviously more of a burden to employers than the other options, but if it’s what is necessary to keep an invaluable employee around long-term, it may be worth considering.
Employer-Initiated Perks
Employers may also want to think about temporary changes to certain workplace policies or practices that would make sense for the summer months. For example, some employers have less business in the summer and choose to close the office early on Fridays during those months. Others will offer an extra day off around certain holidays, such as July 4th or Labor Day. By proactively giving employees a little extra time off, you can choose days and times that are more convenient for the company and ideally minimize employee requests for days off here and there.
Other perks, such as relaxing the dress code to allow shorts or hosting a company picnic, don’t necessarily impact scheduling directly, but they can make employees feel valued. And employees who feel valued will be less tempted to fake an illness for an afternoon in the sun.
The Bottom Line
Work-life balance is hugely important to most employees, and hugely important to an employer’s rate of turnover. In fact, work-life balance has frequently been outpolling money as the most important factor for employees, and these are the kinds of benefits most employees have in mind. While you can’t take away the stressors in employees’ personal lives, and it’s not your job to plan their summer vacation, being understanding of their scheduling wants and needs will help set you both up for success.
Question & Answer
Q: We will soon be switching several employees from exempt to non-exempt. For the most part we’d like to keep their yearly incomes the same, but we want to reduce the pay of one underperforming employee who is being demoted and will be working fewer hours than before. Is this okay?
A: Yes. Reclassifying an employee with a new rate of pay is acceptable as long it’s done for a valid business reason and is not motivated by the employee’s inclusion in a protected class.
In this case, the decrease in pay and reduction in hours comes along with a demotion for poor performance, and a demotion is a valid reason for a pay decrease. You’ll want to carefully document the business-related reasons for the pay reduction: write down the ways the employee was underperforming, how that was impacting your business, and any steps you took to help them improve. Not only will this assist you in communicating the change to the employee, who may otherwise feel they’re being treated unfairly, but it will also provide a useful paper trail if the employee later files for unemployment insurance or attempts to bring a legal claim against you.
If this demotion includes a classification change from exempt to non-exempt, we recommend reviewing now-applicable company policies with the employee, like timekeeping, overtime, off-the-clock work, and scheduling. It’s also a good idea to issue an updated employment offer letter and request that the employee read and acknowledge the new job description. Once signed, these documents should be stored in the employee’s personnel file.
Note that some states specify the period of advance notice for a pay decrease. But even in states that don’t specify a time period, you still need to provide advance notice since pay deductions may never be retroactive.
When Exempt Status Is a Status Symbol
Employees who will be transitioned from an exempt to non-exempt classification because of the new FLSA overtime rules may resent the change in classification. They may feel that tracking time is beneath them, that they’re being micromanaged, that their position has less prestige, or that their work has less value. All of this is understandable; being exempt has become a kind of status symbol. But with the doubling of the minimum salary threshold, it will benefit us all to adjust our mindsets.
It’s important to remember that exemptions to the FLSA’s minimum wage and overtime requirements were made as a benefit to employers, not as a reward to recognize employees for their achievements. Being exempt certainly has its conveniences for employees: they usually don’t need to track their hours, they generally have more flexibility, and they’re paid the same regardless of the quantity or quality of their work. But it also has a major drawback: exempt employees aren’t eligible for overtime pay when they work over 40 hours in a workweek.
When you communicate with employees about the transition to non-exempt status, be clear that the change has nothing to do with their performance or their importance to the company. Rather, it has everything to do with complying with the new overtime rules. The classification change is not personal, and likely impacts a number of employees in the workplace. You might also take this opportunity to praise their work and tell them you value and appreciate what they bring to the organization. Give specifics. These employees may feel down about themselves. You can help by building them up.
But your words may sound hollow if your business culture puts exempt employees on a higher pedestal. It’s one thing to recognize the merit of individual exempt employees. It’s another to imply that exempt status itself signifies greater value. Becoming exempt isn’t like becoming partner in a law firm or receiving tenure at a university. When an employee receives a raise or a promotion and thereby becomes exempt, focus on the job well done or on the new duties—these are the things worth celebrating.
Finally, if you allow your exempt employees flexibility with their schedules, allow the same for the non-exempt employees when possible. Time tracking doesn’t have to mean rigid schedules or micro-managing, and for those who have been reclassified because of the new rules, maintaining a perk like scheduling flexibility can help keep morale high.
