The new overtime law is fast approaching and companies are trying to find the best way to roll out plans to their teams. Communication is key to ensure employees affected by the new regulation, know exactly how it will change their pay or work hours, if at all.
If you make less than $47,476 a year, you could soon be eligible for overtime pay. According to the federal government, this new law will go into effect December 1, 2016 and will extend overtime pay protections to more than 4 million workers within the first year of implementation.
It’s a major change to the Fair Labor Standards Act, or FLSA, and each company must now react with their own plans to stay within budget and find the right way to communicate changes to employees. Click here to see a fact sheet from the U.S. Department of Labor.
Lynda McNutt Foster, the CEO of Cortex Leadership Consulting says, “You can look and see what employees are asking, is it going to affect my pay? Is it going to affect my work hours? Is it going to affect my flexibility? How is this going to affect me? The faster you can tell people how it’s going to affect them, the less anxiety is going to happen in your workplace. And the big thing you want to remember is – when anxiety is up, production is low.”
Chris Head, who co-owns Home Instead Senior Care in Roanoke and Lynchburg, says, “Businesses operate on very, very thin margins and you can be in the ditch in a hurry if you mess this thing up. If you raise your administration costs up too high, it can cause problems and so we have to make sure we don’t jack up the costs but have to make sure we put together a package that fairly compensates everybody. Make sure they don’t make any less than they are currently making, maybe make a little more, I don’t know. If we can find a way to do that. We’ve just gotta spend a lot of time, and it’s going to be very, very complicated. Then we’ve gotta find a way to roll it out to the employees that this isn’t because we want to do this, because we are trying to take anything away from them, but we don’t have any choice. This is the law.”
The way company leaders choose to handle this change, and communicate those changes with employees, could play a big role in the morale of your staff moving forward.
“I think being on salary is a very important thing for a lot of employees. It makes them feel like they’ve gotten to a certain point in their career. To change that back to hourly, changes the amount of flexibility they have. For most people, that’s the point of the morale. So, if they needed to go get their kids one day at 2 o’clock and then make it up on Saturday or the next week, this law very much affects the way they can, or cannot work those hours and have that flexibility,” adds Foster.
As an executive coach who consults executives on a variety of topics, Foster adds, “Leaders need to be proactive about these things. It is their job, as leaders, to find a plan, create a plan and figure out how to effectively communicate it to employees just like any other change that’s occurring. I really want leaders to stand up, step up, and get in front of this, this is important. If you are a leader, you need to get in front of this. You need to find out all the nuts and bolts of it, spend some time and figure out how to communicate this effectively.
Employees want to know how this will affect them, their pay, their work hours. Foster advises, the faster you can tell your team how the change in FLSA will affect them, the better … when anxiety is up, production is low.
For more insight on how this can affect team morale, listen to part one of our podcast on possible company culture concerns.
To learn more details on who will be exempt from this law, listen to part two of our podcast discussing the rules for specific employees.
You can also click here to find a previous WFXR story we put together to help you navigate this upcoming change in the law.