Dive Brief:
- With the impending launch of the controversial Labor Dept. overtime rule, most employers nationwide face the challenge of deciding just how they will decide who is exempt and who isn't. The government says more than 4.2 million white collar workers will become non-exempt.Â
- Among the toughest challenges will be trying to explain how the new rule will affect young employees, because the majority will earn under the $47,476 threshold for salaried employees.
- While workers close to the threshold probably will receive pay boosts to remain exempt, SHRM reports that those younger workers who don't likely will find themselves reclassified as hourly employees – which some may see as a demotion of sorts.
Dive Insight:
Unless an employer is willing to pay overtime, younger non-exempt employees will be stuck at a 40-hour work week – reducing their earning potential, which could increase stress. Plus, as hourly workers, those expecting to have the prestige of being in a professional job role could be let down.Â
With that context, the new overtime means employers will have to re-evaluate and be creative with how their new non-exempt employees can get their work done and meet career goals within a 40-hour work week. In the past, salaried (exempt) workers could just work longer hours without it affecting pay. But not any longer. One way to do that is to make sure time at work is more efficient. In other words, working smarter, not longer.
The overtime rule will take time to be sorted out, and in fact there is recent legislation introduced to try and spread the impact out over the next three years. In the meantime, HR should start building an open, honest communications plan that not only lays out the issue for younger workers, but also obtains their input in creating an acceptable strategy. That could include initiatives such as mentoring or career development workshops, for example.