I’m sure this is going to be a shock to you all, but several studies have shown that employees who use smartphones work longer hours.
Many people are more attached to their mobile devices and laptops than their wallet, so it is little wonder that most employees with access to mobile devices are continuing to check emails, CRM, tickets, and other tech tools outside of the office and normal working hours. While this is sometimes wonderful for responsiveness, it is certainly going to cause some managers and business owners more than a few headaches as we all work towards compliance with the new FLSA rules.
The U.S. Department of Labor’s new rule has been issued, and is set to take effect 12/1/16, and now is the time to start reviewing your pay plans as well as policies, including device management, to accommodate the new rules.
So, What Are Our Options?
This depends on your workforce. An organization with a few employees making close to the $47,476 threshold might be better off adjusting the compensation plans as needed and not worrying about device use. However, for organizations with employees who are closer to the old threshold of $23,660, you are going to have to do some soul searching and math to decide what direction is best.
Your device usage policies will need to clearly delineate which employees are expected to discontinue use of devices for work related purposes, how non-compliance with the policies will be treated, and how to track time for work done outside of the office, .and outside of “normal” business hours.
The Good News
Some of the most likely offenders of the new FLSA rules with regards to mobile device use outside of regular business hours, outside sales people, will remain exempt from overtime. The DOL has yet to update the Fact Sheets available through its site, but the position based exemptions listed here will still apply.
What Should HR Do?
Print out a compensation report and evaluate who is currently paid in a way that is out of compliance with the new rule.
Figure out who you are going to move to salary and who you are going to move to hourly comp plans.
For jobs that will be hourly, start tracking hours now to start determining how many hours of overtime are worked on average.
For jobs on the bubble between changing to hourly or being increased to the higher comp threshold, track those hours as well and calculate which method will work best.
Develop a communication and implementation plan.
Ultimately, this is going to place a greater burden on both management and employees to do a better, more complete, job of tracking hours worked through better management and leadership, and effective disciplinary techniques.
Once an organization has determined a job will now be classified as nonexempt, it may choose from several approaches:
Increase salary level to maintain exemption – and not worry about overtime
Divide current salary by 40 hours and move to paying an hourly rate – and worry about overtime
Convert an employee from salaried to hourly, based on actual hours worked, so the net cost is the same. This will require reliable information about hours worked.
Convert an employee from salaried exempt to salaried nonexempt – and worry about overtime.
Institute a fluctuating workweek – this is a bit complicated, read more here.
About Kevin Steckley: Kevin has been consulting with business-owners and senior leadership teams for over 12 years helping them develop strategies to contain costs, spend more time on strategic planning and drive higher profitability.
Recognized many times for outstanding sales success and business and community leadership over the years, he's worked with small and medium-sized businesses with as few as 3 employees and consulted with organizations with as many as 1,800 employees.
He can be reached at Kevin@windsorhr.com, office telephone at: (800) 297-4962 or by mobile at: (469) 767-0767 or Request A Proposal.