Salary Threshold and the New Overtime Rule

The Impact of the New Overtime Regulation

The Department of Labor’s implementation of the new overtime regulation promotes the hourly compensation of former salaried workers. The adjustments were made after the salary threshold for exempt employees increased from $23,660 to $47,476. (Shilling 2016). The majority of employees received notice that they are no longer considered “exempt employees” at the start of the year as a result. These staff members are keeping a careful eye on their working hours for the first time in their careers. The switch to non-exempt brings a negative attitude to the affected employees who now feel under-appreciated and hurt as vacation, paid time-off among other employment benefits are due to dwindle.

Importance of Explaining the Change

According to Risteau (2016), most employees place a premium on their status as salaried workers. With this in mind, the status change makes the employees acquire a feeling of demotion. It is, therefore, important for employers to explain the inevitable change in advance. By doing so, they reduce the surprise element. More importantly, the employers are expected to explain why the change is happening according to the Fair Labor Standards Act (FLSA) Overtime Rule. Since the new threshold reflects as a major step back in an employee’s career growth, the employers should also point out that the new changes are not related to their performance. The employees have to be reminded of their importance in the company. To soften the blow, the managers can also add that their new positions will ensure they are paid overtime premiums.

Recruiting Challenges

The overtime rule saw the Department of Labor double the cut-off for exempt working. The move brings a significant implication for Human Resource Managers (HRM), as they are tasked with the duty of overhauling their job classifications as well as compensation structures. The sudden cultural change will pose a challenge on the hiring team as they adapt new practices to coincide with dynamics on the job market. In a bid to comply with the new rule from the Department of Labor, some of the entry-level management responsibilities will be pushed to hourly jobs. The result is commotion on the hourly employees as their numbers will increase with reduced responsibilities.

The recruiting professionals are also faced with a challenge on the basis in which they will hire entry-level managers. In the same light, organizations will have a tough time trying to attract fresh graduates from college. In the midst of the challenges, an unforeseen employee turnover is also imminent. Most employees are likely to give negative feedback to their employers after they are pushed back to work as hourly staffs. In fact, most employees perceive the process as a move to reduce operational cost at the expense of the worker. An unprofessional overhaul is, thus, likely to reduce employee morale (National Industrial Conference Board 2016).

Work-Life Balance Challenges

In the contemporary world, the balance between life and work place is crucial. The concept of work-life balance is significant as it gives an employees the feeling of being in control over his/her life. Under the new overtime rule, the non-salaried workers will be eligible for time and a half, popularly known as overtime premium. Additionally, the workers will not be allowed to carry company property such as laptops to their homes. Hence, they will be unable to follow up on pending daily operations past office hours without payment. The new culture might bring problems in telecommunications as the workers adhere to the new policy. On the other hand, the employees will be more flexible to engage with their families during leisure as they get home earlier than usual.

References

National Industrial Conference Board. (2016). Selected interpretations on the Fair labor standards act. New York: National Industrial Conference Board, Inc.

Risteau, D. (2016). American payroll association basic guide to payroll 2016. Place of publication not identified: Wolters Kluwer Law & Bus.

Shilling, D. (2016). Complete guide to human resources and the law.