Recent updates to the Fair Labor Standards Act (FLSA) have companies making some tough decisions regarding employee statuses within their organization. If you’ve missed the whole DOL overtime ruling conversation, a quick reminder:
Beginning December 1, 2016, the rule will change the minimum weekly salary requirements and the primary duty test (what qualifies and explains employee roles). To be ineligible for overtime, employees must be paid a predetermined fixed salary of at least $913 per week ($47,476 per year). If below that threshold, employees will be paid overtime for any additional hours to their 40 per week.
Because of these changes, many companies are facing real complex process changes. While some will move employees from salary to hourly, others are left fearing the future of the flexible work arrangements, like flex-time and remote work, their organization has implemented. The right answer for a company can’t be determined by anyone but the executives who understand the existing culture and employees of the organization.
Whatever way your company chooses to go to remain compliant, the fact remains employees will be feeling some pains right along with their employers. The way you choose to communicate these changes is pivotal to the engagement and satisfaction of your workforce. Don’t be caught in any more compromising situations. Follow these tips and keep that talent you worked hard to hire, retain and develop.
Tip #1: Don’t Put This Off
The FLSA update was finalized months ago and won’t be in effect until December. This isn’t a conversation to rush, but it most certainly isn’t one to leave for the last moment. In fact, you have less than a month to organize and communicate the new direction your organization will be taking. Your employees need time to adjust and accept the way it affects their own agendas, life and finances.
One survey found less than half of the participating employees felt their organizations discuss workplace issues truthfully and effectively. Another survey found poor communication and unsupportive culture is an employee retention issue for 20-30% of organizations, which means those communication problems can have massive consequences. In a situation like this, communication is the best defense a company has to battle employee engagement disruption.
Less than 50% of employees felt their organizations discuss workplace issues truthfully & effectively.
Tip #2: Have a Plan
The decision your company came to was not decided in a day and it most definitely includes caveats and guidelines. Have a clear idea of how those will be explained. Create materials that explain the FLSA updates as well as your company’s response and the new organizational processes. Pass those documents out to employees as you discuss the adjustments. If possible, collaborate with managers and create a list of questions you believe employees will have. Organize those questions into a sheet of preliminary FAQs that can be included in the material package.
Tip #3: Always Remind Employees of their Worth
Always. ALWAYS remind employees of their value to the organization. During difficult conversations, this is absolutely pivotal. Chances are the upcoming changes are going to leave employees feeling a little let down and maybe insulted. Do not let the employee feeling like anything you said could remotely make that true. Instead, discuss the specifics of the new regulations and how the changes created challenges for employment and compliance. Assure workers that the decision was not easy and the company is still invested in their future within the organization. If possible, use this opportunity to have or schedule a one-on-one discussion about the affected employee’s personal career trajectory and how leadership can facilitate the skill development toward that path.
IMPORTANT NOTE: Don’t undermine your employer’s decision. Even if you weren’t the one who ultimately chose the outcome, show sympathy and understanding without pushing the blame on to executives. In times like these, it’s so important you stand by your organization and lift up employees through reassurance. You might avoid direct blame from employees or maintain a work friendship by undercutting the final decision, but you risk the reputation of leaders and the foundation of internal camaraderie as a whole.
Tip #4: Give the Employee the Floor
A job is a livelihood. Have respect for your employee’s position by allowing them to express their frustrations and concerns. As long as the response isn’t dangerous, give the individual the chance to let them be known and empathize with their emotions. It won’t be fun and you won’t have a way to change the outcome, but you can use this opportunity to strengthen the employee’s trust in you. The comfort in expressing their fears and anger will open the floor for goals to overcome the current situation, which opens confidence in their leaders and future with the company. In fact, 82% of employees say trusting their leader is essential to the effectiveness of their job.
Tip #5: Don’t let the Conversation End There
When the initial explanatory meeting is complete, breathe a sigh of relief, but understand your employees will still have questions. Give employees resources for their questions and contacts of individuals who can clarify anything that might be confusing later on. Consider taking that a step further by contacting employees after to ensure they don’t have any additional concerns. The more communication, the better. Employees will know you aren’t hiding any details from them and are still interested in their well-being and career.
Want additional resources on the FLSA overtime ruling? Check out this on SHRM’s website.
These adjustments won’t be easy for anyone. Feel free to explain to employees that this was something your organization isn’t pleased to have to do either. It’s encouraged to be honest, but more than anything, it’s important you create a support system. This is something everyone is going through together and it’s overcoming workforce challenges like these that strengthen teams.
As ClearCompany's HR Business Partner, Laura focuses on all things HR including managing employee benefits, onboarding and engagement initiatives. With a keen focus on best-practices, she serves as a strategic partner to the leadership team by acting as a trusted resource on a wide variety of human resources topics including policy interpretation, creating and recommending enhancements to the HR process, and career development.