Communicating the U.S. FLSA Changes to Employees

If your social media threads look anything like mine, they’re blowing up with information related to the FLSA changes. Most include an overview of the changes and some are more in depth than others. In last week’s article, we identified some considerations for making changes. SHRM’s article explores issues around company property, media policies, and travel. Once you’ve decided what you plan to do to accommodate the FLSA changes, it’s time to start talking to your employees.

In my work with a variety of organizations, I’ve noticed that few people outside of HR understand what the FLSA is, how it relates to exemption status, and the basic intention behind it. Due to this, when it comes time to communicating the changes and how they impact individual people in your organization, it is important to start with the basics. Try something like:

• There are a set of rules that govern meal and rest breaks, as well as overtime. Those rules are called the Fair Labor Standards Act (FLSA) and were originally put in place to address child labor, working conditions, and pay.
• Your job either has to follow those rules (which makes your job not exempt from them, or non-exempt), or it doesn’t have to follow the rules (which makes your job exempt). If your job has to follow the rules, you are eligible to earn overtime pay, per our company policy. It also means you get meal and rest breaks. If you are exempt, FLSA rules don’t apply to you.
• The final requirement for the law is that your salary must meet a certain threshold to qualify you as an exempt worker. This minimum threshold, or salary floor, will be raised in December to $47,476 annually. For those of you who are currently exempt, and whose pay falls below that threshold, we’ll be reaching out to you shortly.

There are some points that may be trickier than others as you begin to communicate the changes across your workforce. Here are some things to watch for, along with tips for navigating the challenges.

Perceived loss of status or flexibility

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Some of your impacted employees may have worked for years to get into a job that affords them the status of exempt. In some organizations, exemption status carries a certain organizational status, often linked with the notion that exempt employees contribute more, or more directly, to organizational objectives. The nice thing about the significant shift in the salary threshold is that this is your opportunity to address that sense of status head on. Consider sharing a message about how all jobs contribute to the organization’s success and provide specific examples from both non-exempt and exempt jobs.

Related to the perceived loss of status, employees may fear a loss of flexibility. Some considerations you may make: how will you handle mobile devices and remote work? How will you handle flexible work shifts, especially in California? Does your workforce value flexibility, as many do? If so, you’ll want to explore options to retain an element of flexibility, and then reinforce that commitment to your employee population again, provide specific examples of the types of flexibility you plan to retain.

Pay for people near threshold

After completing your analysis, you may find that you have jobs with employees on both sides of the threshold. Pay will become more transparent when you begin moving pay for some but not others. Consider explaining how you are taking this opportunity to evaluate fair market pay for employees in that role—assuming you are actually doing so. This is your chance to get everyone into the right spot in range, and to communicate your intentions around fair pay.

Or, maybe your decisions led you to keep some manager jobs non-exempt, and others exempt. Here transparency will come into play when you start counting hours for some managers, but not others, effectively making visible whether their pay is over or under the $47K line. Your messaging opportunity here may be to highlight the relative benefits of being either exempt or non-exempt.

Benefits of exemption status

Workers made newly non-exempt should know the actual benefits of being non-exempt. The primary benefit for them is the ability to have additional earnings. Also, for some, there is the increased chance of achieving work-life balance. Share those perks to ease them into their new, highly appreciated, exemption status.

Workers who are just over the threshold may catch wind that they’re missing out on the chance to earn overtime. This is a good time to remind them of the benefits they receive as exempt workers. Depending on your culture, that may include doing meaningful work, having access to organizational leaders, or perhaps a greater opportunity to work remotely.

As is true with any type of employee communication, it’s about what matters most to your workforce. Things that may impact your message are your organizational culture, industry, availability of jobs in your area, generation of your workforce, job functional area, job level, and more. Tailor your message for your specific audience and you should be in good shape. And, remember the cardinal rule of communicating in times of change: communicate, communicate, communicate most people want more information, not less when in times of uncertainty or confusion. This may be the right time to get in front of employees to ask what matters most to them.