I’ll be honest, I cried a little bit when I got the news that the FLSA changes were postponed. As the Director of Total Rewards for Associa, a PayScale customer, I’ve been working on the changes – analyzing, assessing, recommending, and communicating the implications – since March. Just as I was starting to see a light at the end of the FLSA tunnel, bam! But I have to say, the required changes were never the best move for our business, so we welcome the opportunity to spend those dollars more strategically. At the same time, we did a lot of good work this year, and can definitely feel the benefits of that work regardless of what happens with FLSA in the new year.
What did I do?
We did a very thorough review of the impact of proposed FLSA changes on our jobs. The work started with an evaluation of our roles – we needed to determine which current exempt roles were in jeopardy of falling under the proposed salary threshold. We identified the delta for current exempt roles that would be hourly under the new regulation, and decide which ones would remain exempt. This evaluation informed our initial cost and impact analysis.
We began working with leadership to ensure alignment with job duties and job titles, which was the bulk of the 7-month effort. This was important because it helped us finalize our initial list of roles that would transition. We used the list of roles to start preparing each branch on a strategy to handle the transition. We were looking at less than ten percent of our population being impacted when all was said and done, although in an organization of our size, that still meant five hundred people across over a hundred locations.
Once we knew what needed to happen, it was all about building an effective, executable communication plan.
What did we tell people?
With executive support, we decided to communicate directly and only with employees who were impacted. There had been several broad and erroneous articles that were sent to some of our employees, and we didn’t want to create confusion with more mass communications. Instead, we addressed employee questions directly.
Our overall messaging was to provide reassurance that we were developing a plan to ensure continued compliance, and we would communicate more once the plan design was complete. Part of the Associa culture is to focus on the employee experience, so we kept that forefront in the implementation of the project. We kept employees in mind, even after the announcement of the delay, when we decided to hold on FLSA adjustments for now. We know there may be some tough conversations, but moving to hourly status wasn’t wildly popular and the operators and leadership are on board.
Did I waste my time?
Absolutely not. I feel great about the work I did during the course of preparing our company for the proposed changes. The threshold that was originally pushed out by the DOL was a bit of an arbitrary number for our organization, and didn’t necessarily reflect the market for us – especially given our multi-site, multi-location business model across all states. But there were definitely some major advantages to having done our homework:
- This regulation change gave us the ability to evaluate our roles and centralize duties across branches. Although, because we spent so much time on compliance, we didn’t address other pay opportunities in the organization. The delay has actually given us the time, and budget, we wanted to be more intentional about where we spend our comp dollars. At this point, we will take the spending set aside for FLSA and utilize it in a more incisive manner and focus on market competitiveness which benefits both our employees and our organization overall.
- Additionally, the project spurred rich conversation with our leadership about centralizing career pathing, budgeting, and expectations that could be brought to light and addressed at the same time. It forced us to look at processes that overlap and streamline work to simplify pay administration for home office.
- Finally, it caused me to have what felt like 6,792 conversations with leaders of our organization who now truly understand that our efforts in HR are to be utilized as a tool to help them manage their business better, and to be business partners support who their operational efforts.
What now?
There’s never a dull day in compensation! Changes to the regulation were always a possibility, and most companies implemented their plans to comply with the proposal early in the year. As compensation professionals, we constantly reposition and adjust with the ebb and flow of our respective businesses to ensure we maximize every dollar possible, while keeping our most valuable resource in mind, our employees.
It can get tricky balancing what is best for everyone, but that is the beauty and insanity of my job. I love it and I wouldn’t change a thing. I didn’t even let it distract from the Thanksgiving grub-down at my house! Our focus has since shifted to other items like merit, benefits enrollment, and incentive pay. I have a feeling we will hear more on FLSA in the early weeks of the new presidential administration, and until then we will continue to make strides to continually work smarter and help make our company a great place to be.
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