Here’s my common sense response to the FLSA proposed rule. Pay your people for the work they are doing. Seriously, that’s all. Ideally, pay them what they are worth. If you don’t think they are worth what you’re paying them, it might be time to part ways.
Let’s look at this together. You’re paying people $455 a week, and you’re lobbying that they won’t want to be hourly because being classified as “exempt” is an honor to them? Do you realize that $455 a week is $11.38/hour? That’s all! $11.38 an hour. If you are still paying people who qualify for exempt status $11.38 an hour, now is a great time to reevaluate your business plan. Can we be honest here? Are you paying them $455 a week because it’s cheap labor? I realize that not every business has money coming out of their ears or can pay beaucoup bucks for folks; but for exempt level duties, can we all agree that $11.38 is not a lot of money?
Let me try to sound less harsh. I really considered making this one a video blog so that my tone would come across correctly, but decided against it.
I want to challenge you to not take the stance that your employee is going to be upset if they go from exempt to non-exempt because of a “status in the workplace.” Talk to your employees, find out what they are going to be upset about, and start building a strategy that works best for you and your employees. I want to challenge you to evaluate your salaries and see how many people whose salary you will actually have to “double” to get them to the right amount to meet the salary test for exemption. Hopefully you’re exempt level employees aren’t that far from the suggested salary now. I know, this sounds ludicrous! You can’t possibly conduct good business through effective communication, can you? Give it a shot!
I know there are many more complicated layers to this and it will vary from employer to employer, but dial down the drama and let’s do what we do best—solve some business problems! Saying “no more overtime” isn’t the answer either. Quite frankly, there will be times that your formerly exempt employees are going to have to work an hour or two of overtime. It’s not going to break the bank, and if you aren’t overworking them and you’re truly managing their performance, you’re both going to be fine.
Let me leave you with this. There are some organizations out there that are taking advantage of some 19-year-old employee who is working her ass off, lining their pockets with money, and working for pennies all because someone sold a “status of exemption” to her as being a good thing. That 19-year-old employee working her ass off needs someone to have her back because she doesn’t know a lick about the FLSA, DOL, exempt, non-exempt, duties test, etc. She just thinks she’s being a hard worker and doing what’s right.