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Jun 15, 2016

Looming changes to the Fair Labor Standards Act (FLSA) overtime rules mean businesses of all sizes have to make some difficult decisions about how to control labor costs. While there are months to go before they take effect December 1, that’s not as much time as you may think. A crucial factor to consider? How best to have some tough conversations with employees who will be impacted.

Even if your company is still weighing whether to pay someone overtime or raise her salary to the new threshold, it’s important for HR leaders to start educating employees about the rule changes now so that morale doesn’t suffer. The new overtime rules have been widely covered by the media and employees who’ve heard about the changes may be worried about what those changes hold in store for them.

Communication is key and how HR practitioners address the changes can have a large impact on workplace culture.

Here are a few things to consider.

Educate all employees

It’s key that all people within the workforce understand the new rules and how they may be impacted – senior management, managers and employees. Be sure to level with employees with complete transparency about what’s happening. Even if the company hasn’t decided what changes will be made, it’s important to avoid blindsiding people after the financial analysis has been run.

Once the company decides which employees will be impacted, develop a plan of action around who will communicate the changes, what will be communicated and when. Draft talking points and FAQs to ensure the messages being delivered are consistent.

Use a full-circle communications strategy

When education is this important, companies need to use every tool and communication channel they have available to deliver open, honest information. Whether communication is done face-to-face, via social media, streaming video, or email, you need to explain to employees in simple terms what the law means and how it may impact them personally. Then, be available to answer questions.

If the company substantially increases some employees’ pay, others may have questions about why their pay isn’t increasing. Whether you solicit questions via email or have an open-door policy, it’s important to hear employees’ concerns and address any questions.

Be sensitive with your messaging

Employees who are reclassified from salaried to hourly could respond emotionally. They may associate being exempt as an indicator of where they are in their career and they may believe the changes indicate they’re not as important as they were before. Consider restaurant and retail employees who work their way through the ranks and may be on the brink of becoming entry-level managers (and in turn possibly exempt). This could be seen as a major blow to their career aspirations.

Any big change like this is going to be taken personally by employees. One minute they are salaried and have certain flexibility, and the next they may have to clock in and out, have less flexibility, and may even lose some conveniences.

Reassure these employees by sending the message that it doesn’t matter how their work is classified since their contributions are still vital to the company’s success. Employees need to know they are still highly valued and that this is about a change in the law – one ostensibly designed to help people be paid more fairly — not their job performance.

Also, be sure to refer to reclassification of roles and not of individuals. That should help employees consider the changes less personally, and minimize emotional reactions.

When communicating changes to those impacted, it’s best to have a face-to-face discussion.

A little more than a decade ago, there was a change to the FLSA regarding classifying exempt versus non-exempt employees. Employees I sat with to discuss the changes, and what those changes meant to them, were very appreciative to get the information that way.

Train on new policies and time-tracking systems

Once the company updates its wage and hour policies, reclassified employees and their managers will need to be trained on these new policies and how to track their time. These employees will likely need to follow new policies dictating mobile device usage, travel time, meal and rest breaks and off-the-clock work. It’s important they understand what is permitted, what payroll changes they may see, and how to use a time and attendance system.

A human capital management (HCM) suite can be used as a way to communicate with these employees by offering news articles on the changes, training videos on new policies and time tracking systems, and other educational resources via an employee self-service portal.

While many companies are still focusing on the financial impact of the rule changes, it’s vital to consider the human relations impact. You don’t want to lose valuable employees because they fear changes that may be coming. Start the dialogue now so employees are informed and stay engaged every step of the way.