Today the U.S. Department of Labor (DOL) released new rules dramatically increasing the new minimum salary level for the executive, administrative, and professional employee exemptions (salaried employees) under the Fair Labor Standards Act (FLSA) to $913 per week, or $47,476 per year. This new salary threshold—which will become effective on December 1, 2016—more than doubles the current minimum salary level of $455 per week, or $23,660 per year, and will have a dramatic impact on employers.
The new salary requirements will apply to the salaried employees you have in executive, administrative, and professional exemptions. Employees who do not meet the new salary requirements (those who do not make at least $913 weekly) when the final regulations become effective will no longer qualify for one of these exemptions, which means they will have to be paid overtime compensation when they work more than 40 hours in a workweek.
Other major highlights from the final regulations include the following:
- Increase to the total annual compensation requirement for highly compensated employees from $100,000 to $134,004 per year.
- Future automatic updates to the above thresholds will occur every three years, beginning January 1, 2020.
- The salary basis test is amended to allow the use of nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.
The final regulations will become effective on Thursday, December 1, 2016.
How Can Organizations Prepare?
Determine Who Needs to Be Reclassified
Employees who are currently classified as overtime-exempt (salaried) may need to be reclassified as nonexempt under the new regulations, especially if they:
- Earn less than $50,000 a year
- Hold the same position occupied by many other employees in the company; or
- Work in jobs as accountants, assistant managers, sales and sales support workers, help desk employees, customer service representatives, technicians and business analysts.
Develop a New Compensation Plan for Reclassified Employees
Employers should compare the cost of giving raises to employees who are currently exempt but make less than $50,000 per year against the cost of reclassifying those employees as nonexempt and paying them overtime, given the number of hours those employees are currently working. Another option is a cost-neutral solution under which hourly pay is set at a rate will result in the same weekly compensation as the formerly exempt employee’s salary. This only works if an employer can accurately estimate how many hours per week a reclassified employee will work.
Review Wage and Hour Policies and Processes
If exempt employees are reclassified as nonexempt, it is crucial to implement timekeeping processes. The time worked by nonexempt employees must be accurately tracked and documented. Employers should also adopt policies on unauthorized overtime work, meal and rest breaks, travel time and mobile device usage.
Employers should develop a strategy for communicating any changes in classifications, policies or procedures to employees. Identify who will deliver the news, when the news will be delivered, and the format in which the news will be delivered.
Train the Reclassified Employees and Their Managers
You might have employees who have been exempt forever, and all of a sudden you have to start tracking their time, or managers who never managed hourly employees. Supervisors and managers need to know what constitutes "working time", and employees need to know what the company’s policy is regarding overtime.
Fact sheets and other materials to help employers and workers understand how the rule will affect them and the broader economy are available dol.gov/overtime.
Employee absences can cost employers up to one-third of their payroll costs, according to some estimates. Ensuring that your employees stay at work, or return to work quickly and easily after a simple illness, therefore directly affects your company’s bottom line. Here are five quick tips for managing absenteeism at work:
- Be sure attendance expectations are clearly set. Some absences and tardiness can be attributed to simple misunderstandings about the time work should begin. The solution may be as simple as creating a clear attendance policy if one does not already exist. Setting expectations also requires clear communications about the policy and the repercussions of absences.
- Enforce the attendance policy consistently. This is more difficult than it sounds. It can be tempting to allow more absences than the attendance policy outlines when employees are facing difficult situations. While an employer is, of course, free to do so, it’s better to have a policy that has flexibility built into it so that it can be implemented consistently and not incite claims of favoritism or discrimination when it’s applied differently for different individuals.
- Ensure all employees know what to do when they need to be late or miss a day. Workers should know when and who to call and what information needs to be provided. They should also understand what documentation, if any, they will be required to provide to the employer upon return (e.g., a doctor’s note).
- Consider rewarding good attendance. Be sure not to penalize those who have taken protected leave, but consider implementing rewards that encourage good attendance practices, as these can be good motivators. This can even be as simple as providing positive feedback and encouragement to employees with good attendance.
- Consider changing schedules when appropriate to accommodate differing employee needs. Sometimes a small schedule change can eliminate problems.
On the surface, terminating an employee for poor performance seems simple. It’s nothing personal. The employee just isn’t getting it done and would be better off in another job. But even when a termination is 100% justifiable, managers must be extremely careful how they conduct themselves. Terminations, no matter how clear cut, can have legal ramifications.
Most businesses are protected to a certain extent by at-will laws, which allow the firing of employees for no reason. However, at-will employment does not keep an employee from filing a lawsuit for wrongful termination and, even if the courts rule in your favor, your business will be required to pay court costs. It’s best to take a few measures to protect yourself before firing an employee to avoid a costly legal process.
Here are 5 Tips to Termination:
- Document, document, document! Detailed, consistent documentation can defeat many claims of defamation, discrimination and wrongful discharge. Great documentation shows a pattern of clear expectations on your part, and repeated failures on the employee’s part.
- Make your Employee Handbook work for you and not against you. Make sure your employee handbook and policies are clear and concise. If you just downloaded one from the Internet, chances are it needs updating. Review the handbook annually, and get a new acknowledgement from employees every year.
- Make sure your termination process is fair and standardized. It should be delivered consistently no matter who the employee, in fair, non-emotional way. Don’t embellish the reasons for termination, you don’t want a defamation case on your hands!
- Conduct a proper termination meeting. Unless the employee is volatile, do not terminate them via email, phone, or text. If possible conduct a proper termination meeting. Have witnesses, be brief and concise, and document!
- Involve HR! If an employee is in a protected class, has a known medical condition or disability, has taken job protected medical leave, or if there is suspicion of any other legal issue (e.g. harassment, retaliation), be sure to consult with HR or an employment attorney before terminating.
Turn to any HR magazine, blog, or conference, and you are certain to hear the term “HR Metrics” before too long. There are several terms that go along with metrics, so let’s take a moment to define and differentiate each of them:
- Measures (or measurements) are actual numbers and small bits of data used to create the metrics. For example, the number of full time equivalents in your organization and the number of terminations in a year are both measurements. As they say, Garbage In, Garbage Out – so be careful that you are gathering accurate measurements.
- Metrics are the ratios or percentages or numbers that are created using the measures. To continue the example above, if you divide the number of terminations by the number of employees in a given time period, you create the metric of a Turnover Rate for that time period.
- Analytics take metrics and apply them to trends and future-focused events. Analytics… well… analyze the data into useful information that a company can use to make future decisions. Another way to think about it is that analytics turn numbers into a story, often to help pinpoint a need for change in the organization. When used to identify future needs, they are commonly referred to as predictive
- Big Data is a conglomeration of metrics and analytics using a huge (big) pool of data. HR professionals can look to big data numbers to use as benchmarks where relevant.
HR professionals can benefit from employing metrics and analytics into their presentations. Presentations needn’t be formal executive PowerPoint slides; they can be as simple as having a 1-on-1 conversation with your boss and trying to sell him or her on an idea that you have.
I believe that HR Metrics is a hot topic because it provides some sort of measurement to HR’s value to an organization. HR is sometimes viewed as an expense in an organization. Metrics help dispel that viewpoint for effective HR functions. For example, if you can show that this year’s turnover rate is lower than last year, and can tie that to a dollar amount, you can cite the ROI of your new wellness initiative or the cost-benefit analysis of your increase in benefits.
For example, your company is tracking turnover rate, training time, and average time-to-fill for recruiting your talent. In watching the month-to-month metrics on these three items, you notice that the turnover rate has steadily increased over the past year, actual training time has decreased, and the time-to-fill has decreased. What does this tell you?
Using this limited information, we might look at the following options:
- Look at creating a more formal Onboarding program to provide more robust training at the beginning of employment.
- Investigate the recruiting process – are we hiring warm bodies, or are we doing our due diligence to hire the right person? As Jim Collins would say in his book “Good to Great,” are we making sure we are getting the right people on the bus, in the right seats?
- Interview workers and managers in the organization – especially if the turnover is high in one department – to discern if there is a communication error or something more egregious happening. You know the adage: people don’t leave jobs; they leave managers. Taking the time to gather this qualitative data will help you determine if you need to implement manager training, get executive coaching for one particular manager, or look for a way to manage the employee out of the organization.
As you can see, metrics provide the information, which we gather together to tell a story (analytics) to present a business case about WHY we need to change or offer a program. Metrics are a great tool to use to overcome the “because we’ve always done it this way” mentality, because numbers don’t lie.
Jennifer Currence, MBA, SPHR, SHRM-SCP, is president of OnCore Management Solutions. She is an HR consultant, corporate trainer, and business coach based in Tampa, Florida.
We’ve all been there. You open your eyes, and know you’re sick. The headache, stuffy nose, body aches. You knew you’d eventually catch the “bug” that’s been going around. But you’re a dedicated employee, so you take some colds meds and head into the office. You’ve got work to do, that project deadline is looming, and you don’t want to leave your coworkers to carry the load. However well intentioned, this is a huge mistake.
Flu season generally starts in October and peaks in February, according to the Centers for Disease Control and Prevention, and somewhere between 5 and 20 percent of Americans get the flu every year, with hundreds of thousands hospitalized. During this time of year, many Americans with fevers, aches, and runny noses will face a question: Should they go into work?
When it comes to the workplace, the office environment is the ideal conduit for germs to spread, even when only a single person is sick. Consider the routine of office activity, commonly touched surfaces like door knobs, microwaves, phones, and the coffee pot.
Best health practices include:
- Avoiding contact with sick people
- Staying home when sick, and encouraging employees to do so
- Covering coughs and sneezes
- Proper hand-washing hygiene
- Disinfecting common surfaces.
As an employer or manager, you play an important role in encouraging your employees to adhere to these guidelines. You can reinforce good habits by prominently posting the CDC guidelines in common areas; providing supplies such as tissues, disinfecting wipes; and hand sanitizer; and even offering free or low-cost flu shots for those employees who wish to get vaccinated. Finally, encourage sick employees to remain at home until they are symptom free for at least 24 hours.
Note that many states and cities may require employers to provide a certain amount of sick leave, either with or without pay, to their employees. Make sure that your sick leave policy complies with any applicable state or federal laws and is clear in specifying the eligibility rules, whether sick leave is paid or not, how many days are provided each year, and any carryover provisions. Regardless of what is required and what you decide with your sick leave policy, you should include the policy in your employee handbook if you distribute one.
Remember: while it may be tempting to allow a sick employee to come to work in the name of productivity, an outbreak of influenza or other communicable disease can thwart the productivity of your entire workforce for days or even weeks-and that’s a cost no business can afford.