Dealing with OT's new rules
Timothy Murphy
Barring court or Congressional action, millions of American workers will become newly eligible for overtime pay on Dec. 1. Up to now, if a worker performed certain exempt duties and was paid at least $455 per week in guaranteed salary, the employer did not have to pay overtime when the employee worked more than 40 hours during a workweek. On Dec. 1, that $455 salary figure will increase to $913 per week, an annualized salary of $47,476. An estimated 86,000 Massachusetts workers will be eligible for overtime.
Employers have several ways to deal with this new rule. One way is to convert these newly overtime eligible employees to hourly employees and pay them for all hours worked, including overtime. Along with this change, employers will usually closely monitor the number of hours worked in order to limit overtime and manage overall labor costs.
Affected employees may react differently to being converted to hourly employees. Some employees will be pleased with the changes, some will be unhappy and some will have little or no reaction to the change. Reclassifying employees from exempt to hourly, non-exempt offers overtime options, but some employees may consider it a loss of status. While some employees will welcome the chance for overtime pay, others may see the need to punch a time clock as a demotion.
Here are questions affected employees will likely have:
• Is this a demotion?
• Do I have to change the way I work?
• Will I lose my flexibility?
• Will I still be able to advance my career?
• Will I make less money overall?
Train your managers to explain why the change is taking place and how it is not a reflection of how the company views the employee. Train your managers to ensure that all hourly employees are paid for all time worked and that they communicate that this is the main benefit to being an hourly, non-exempt employee.
Explain the new timekeeping procedures. Employers must keep track of the time hourly, non-exempt employees work to ensure employees are recording all time worked.
Maintain regular communication. Give employees an opportunity to ask questions, voice concerns and have an open dialogue to learn more about the changes.
Appoint someone other than the employee's manager as a point person for communication. This person should be someone who communicates well and has a good understanding of overtime law and its classifications.
Be proactive. Supervisors should check time cards/records to be sure non-exempt employees are not working off the clock.
Determine which jobs should be converted to hourly, non-exempt. Identify employees that are likely to be affected by the changes.
Create your communication plan now that explains the what/why/how/when of the changes to share with affected employees.
Review job descriptions to determine whether they are still accurate and reflect the jobs being performed. Review exempt employees' actual job duties to ensure that they still meet the duties test of the white-collar overtime exemptions.
Conducting a self-audit now will help ensure that your company is in compliance with the law.
Timothy Murphy is a partner at Worcester law firm Skoler, Abbott & Presser, P.C.
WBJ Web Partners
Most Recent
Most Recent
0 Comments