The New Salary Level: How Employers Manage the Unintended Consequences – Second in a Series

This is the second article in a series about the December 1, 2016, increase in the salary-basis test, increasing the minimum salary from $455 a week to $913.

As a result of this change, employers may choose to move exempt employees who make significantly less than $931 a week to a nonexempt status. As you have already imagined, this is likely to create a number of complications. One of those complications is dealing with employees who were exempt and are not pleased to now to be treated as hourly employees.

What is an employer to do? You must follow the law, and yet to do so creates unhappiness. There are some steps you can take to help. Knowing ahead of time how you will handle this change will allow you more time to communicate effectively with your employees in this circumstance. If employees have time to realize a change is coming and understand the reason for the change, it allows them to adjust to it.

One of the main complaints may be that the employee is now required to keep time records, when previously this wasn’t a matter of concern. This can feel like a demotion in and of itself.  Talk to your employees who are in this position and determine the easiest way for them to keep track of their hours that still meets your needs. Remember that in most cases, all that is legally required is to track the number of hours per day and the total hours per workweek. Some employers use exception reporting for those employees who have a set schedule they tend to follow week after week. Employees sign off on time sheets with the pre-set hours, unless they work different hours, and then there is a place on the sheet to note those differences.

There are employers who offer different benefits to exempt employees. Of course you must follow your plan documents, but perhaps you change your plan to indicate which positions have which benefits, regardless of the exempt or non-exempt status of the employee.

You may have other areas of concern. We are talking to many employers about this, and we are happy to help. Members can simply call to talk about their circumstances and receive answers and possible strategies to put them in the best position possible to manage these significant regulatory changes. You can contact us at 800.884.1328.