Future Friday: The coming conflict between flextime and the FLSA

In early July the US Department of Labor announced changes in the Fair Labor Standards Act that will radically alter the number of workers who will no longer be considered exempt. As of the moment the projected minimum salary level is anticipated to be $50,440. (You can learn more here.) At the same time surveys and articles are being produced that show that to attract Millennial employees businesses are going to have to offer flexible work schedules. I think this trend will put employers in “conflict” with the requirements of the regulatory changes that are coming in 2016.

What is the conflict?

A recent survey showed that Millennials are looking for flexible work arrangements, which include the ability to work from anywhere and anytime. A report on the survey said “If companies want to attract the top performers from this generation, they have got to figure out how to accommodate this demand for flexibility or risk losing them to their more adaptable competitors.” Unfortunately the newly proposed regulations will make it more difficult for companies to do this.

The regulations require that anyone that is making less than $50,440 (in 2016) be deemed to be a non-exempt employee. This means that they have to be paid overtime anytime they work more than 40 hours in the week. It is doubtful that younger employees will start off their careers at this salary level. Therefore, regardless of their actual job duties, they will be a non-exempt employee.

Having a non-exempt employee brings with that classification a time-tracking burden and increased management oversight. Most current exempt employees are not used to accurately tracking their time. Most employers are not used to paying attention to that time. As a non-exempt employee an accurate record is required because that is the basis on which overtime is determined.

The Challenge

The challenge in hiring a Millennial that will be a non-exempt employee is to help them realize that regardless of where or when they work they have to accurately record their time. The other part of this challenge will be training managers to pay attention to and effectively manage that non-exempt employee. Without effective management the overtime bill can get large very quickly.

Companies will need a system that logs when an employee is working, regardless of the time of day and regardless of the device they are using to do the work. Being unable to produce those records may result in fines and penalties at some point in the future.

I am not saying this cannot be done. It can. It is a matter of adapting to a new way of doing things. You can have technology that tracks time. You can change habits and establish new habits. You can establish new methods of management.

The problem I have with this change is that it is flying in the face of the way the world of work is changing. Having more rules that everyone has to abide by is not conducive to more flexibility in the workplace. More rules generally mean more restriction.

We do need to find ways for employees and owners to make more money. I am all for that. I just don’t see the implementation of more regulations being the road to that future.

Photo credit: Photo by jesadaphorn