HR Policy Conference Call on New Overtime Rule Explores Options, Need for Effective Communications

Employment Law

This week, in a conference call on the Labor Department's new overtime rule, three HR Policy members discussed the various issues they are facing and their options for implementing the rule.  The call was hosted by Pitney Bowes Executive Vice President and Chief Human Resources Officer Johnna Torsone, who chairs our Employment Rights Committee, and included Geoff DeBoskey, Managing Director, Employment Law and Immigration, of Accenture, and Mike Zorn, Senior Vice President, Associate and Labor Relations, at Macy's, Inc.  The regulations increase the minimum salary for an overtime-exempt employee under the Fair Labor Standards Act to $47,476 per year.  The group discussed the three main options an employer has regarding employees who are currently treated as exempt:

• Increasing the salaries to maintain exempt status;
• Converting employees to nonexempt status, maintaining their salaries at their current level of base pay, and paying overtime for hours worked in excess of forty per week; and
• Converting employees to nonexempt status, but lowering their base pay in anticipation of the costs of paying overtime.

The speakers also emphasized the importance of carefully communicating any changes with employees and, depending on the number of affected employees, whether the communications should be made to the broader employee population or just those affected.  They also discussed how many employers may use the new rule as an opportunity to clean up any other FLSA and independent contractor issues with which they may have concerns.  They also discussed the potential impact the rule would have on workplace flexibility, access to email and schedules outside of normal working hours, employee morale, and their ability to recruit millennials with college degrees.  These issues will be further implicated when the Labor Department requests information from the public on the use of mobile devices, hours worked, and "last minute" scheduling practices sometime this summer.