Friday, October 28, 2016

The New Workplace Law of the Land for Exempt and Non-Exempt Employees

Oct. 28, 2016

Dear Cathy:

I have a question about rights as an employee for the state. I'm in Alabama, but any advice you can provide will be helpful. Can the state department of health change a person’s status from exempt to non exempt? Without my consent, my job made us aware of new changes on my job and now we have a ‘clocking in’ system. Shouldn't I at least be getting overtime pay rather than just compensatory time? Confused, Alabama

Dear Confused:

Compensatory time off is:

  • Time off with pay in lieu of overtime pay for irregular or occasional overtime work, or 
  • When permitted under agency flexible work schedule programs, time off with pay in lieu of overtime pay for regularly scheduled or irregular or occasional overtime work. 
Employers are always trying to tighten their belts and save money, however, what you are now experiencing is the “New Law of the Land.”

It won’t be a picnic telling a worker who has long been salaried, never had to punch a time card and often worked after hours that all that’s going to change.

But when the U.S. Department of Labor ( publishes its final overtime rule, which happened on May 18, 2016, employers across the nation will have to notify exempt workers that their salaries don’t meet the federal threshold to remain exempt.

Employers can expect many employees to feel hurt and under-appreciated. Many workers place a premium on the prestige of being considered an exempt or salaried employee—no matter how much we emphasize that it’s just a categorization of pay and not a reflection of importance or level of contribution.

It may seem like they’re being demoted. The proposed changes to the overtime rule increased the salary threshold for employees who are exempt—and therefore not eligible for overtime—from $23,660 to $50,440. In the final rule, the level dropped to $47,476.

Employers can either increase an exempt worker’s salary so the worker remains exempt, or reclassify him or her as nonexempt. Many are likely to do the latter.

Reclassified workers will—perhaps for the first time in their careers—have to track their start times, end times, break times and meal times. It will be hard to accept and even implement. It'll be a cultural change to many and perceived as a step back in career growth, however, it’s now the “New Law of the Land.”

If an employer has different levels of benefits for exempt and nonexempt workers, that will have to be communicated as well. Many employers will have to make changes in time card requirements, vacation and sick time accrual, and bonuses for reclassified workers. 

All of these changes will be viewed negatively and there is no way to dress it up, again this is now the “New Law of the Land.” This would be a good time to start a business on the side. 

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