Remember how good it felt to so pro-actively plan for the FLSA changes? On Nov. 22, I received a shocking email saying there was a national injunction barring the implementation of the new FLSA rules. Yes, I knew it COULD happen, but didn’t EXPECT it so close to the Dec. 1 deadline date.
Here’s how timing most likely caused havoc in many organizations that were pro-active:
Since Dec. 1 may not have been the beginning of the pay period for quite a few organizations—probably because it was on a Thursday, pay increases may have already gone into effect.
Organizations may have already communicated upcoming salary increases to employees.
Organizations also may have told employees who were moving to non-exempt that they needed to start reporting their hours.
Finance probably planned for the additional pay and possibly benefits expense.
This creates a dilemma for your organization. But, it could be turned into a win-win for you and your employees. How?
If you communicated the increase to employees, don’t rescind. Let them know that although there is an injunction on the FLSA changes, the organization keeps it commitments and will honor the pay increases that were communicated.
Since most employees who were previously exempt and then moved to non-exempt feel like something was taken away, tell them that they will not have to report time until the outcome of the injunction has gone through the legal process. Then, the company will follow the law because it’s the legally responsible thing to do. That way, employees understand that their organization is not only law abiding, but considerate towards them as well.
If you have employees who were paid pretty close to the current salary threshold, consider giving them a bump anyway. Take a look at market information and see where their pay is in relationship to it. If it’s low, give them an increase and use it as an opportunity to create good will by letting employees know that although this was originally an exercise to meet FLSA changes, it created an opportunity for the organization to be market competitive.
The ramifications of the FLSA injunction can be turned into “WOW” moments for the organization, and start the beginning of a great 2017. Hopefully, we will hear something soon. Have a wonderful Holiday season!