Overcome the Time Tracking Stigma

How to Talk to Employees About Salary Reclassification

The Department of Labor’s new overtime rule might initiate some awkward conversations with your previously exempt salaried workers. The trouble is that, in order to pay them overtime, nonexempt but salaried workers will need to start tracking their work hours—and some of them may not be happy about this.

You’ve decided to keep your previously exempt salaried workers at their current salary range as nonexempt salaried workers, and you’re preparing to talk to them. How will employees respond? Chances are that they will probably exhibit one of these reactions:

• Some employees will be generally pleased with the changes. They could see this as an opportunity to get compensation for every hour worked or ensure a positive work-life balance.
• Some will be unhappy. They might see this change as a disruptive force for their work lives and their career. They might even see it as a loss of status. Even if they’re not vocal about it, these changes could decrease their job satisfaction and convince them to look for new opportunities.
• And some will have little or no reaction to the change. They either aren’t that invested in their work, or they really don’t care about the number on their paycheck.

Though some employees will welcome the chance to receive additional pay, others may see it as a loss of status and inconvenience. You don’t want to ignore these emotions, but what can you do about them? We’ve compiled some resources to help you prepare for these awkward conversations.

Tips to Prepare Your Employees for Time Tracking

Train your managers.

After all, they’ll probably be responsible for communicating these changes to your employees or at least be on the front lines for questions and enforcement. It’s important that managers and supervisors understand why these changes are happening and set the appropriate tone.

Explain why this is happening.

You know that this change is mandated by the federal government, but do your employees? Tell them that their new nonexempt status is not based on the discretion of the company, and it is not a reflection of how you view their performance. In other words, this is not a demotion. This is a new way of calculating pay, not position. If employees understand that these are objective rather than subjective standards, they will likely feel less offended or threatened.

Be prepared to talk about money.

Employees may have concerns that they will make less money with these payroll changes. Assure them that this is not the case (unless, of course, you are adjusting their salary down to account for overtime hours). Focus instead on the benefits of this change: they will now be paid for every hour they work. Regardless of whether this was a problem in the past, this change prevents endless unpaid evening or weekend work for nonexempt workers.

On the other hand, some employees may be worried that they will miss out on important after-hours business discussions or events which they were previously involved in. Think about whether this will be the case at your organization. (And be honest. If you will stop inviting nonexempt workers to after-hours business events to avoid paying overtime, they will find out eventually, and they may be resentful if you hide it.) Have a plan for how to handle these questions, whether it is allowing employees to flex time in the week or offering occasional overtime for important meetings.

Discuss new work routines.

As exempt salaried workers, your employees may have developed habits that will need to change, such as working through lunch or staying late. Change isn’t easy—especially if they’ve been with the company for a long time—so you’ll want to discuss their work schedules and set expectations.

• If nonexempt salaried employees will be able to make their own schedule (as long as they track it), they might not need to change much besides the actual task of logging hours and keeping to 40 hours a week. Go over any new procedures for when overtime is OK and how this will be handled and approved at your company.
• If employees will be expected to hold standard hours (like 8 a.m. to 5 p.m.), they may need to stop old routines of working through lunch, staying late, or even answering work correspondence at home. Supervisors may need to monitor and enforce their employees’ work habits in order to avoid unanticipated overtime—and this may be upsetting. This can be easier to do using electronic time tracking, since this can be seen as less personal or overbearing. Warn them about new procedures and how these will be managed moving forward.

Regardless of how you plan to handle work schedules at your company, know that nonexempt employees must be paid for all time worked, whether or not the supervisor specifically authorized the time. If employees refuse to change their habits, there may be some difficult conversations ahead.

Communicate regularly and assign a point of contact.

With any disruptive change, regular communication is critical. It will make employees feel that their concerns have been heard, and it may help you identify problems before they get out of control. When you announce these changes, make sure your employees get an opportunity to ask questions and voice their concerns about these regulatory changes as a group.

But don’t forget to plan for private conversations as well. Appoint someone as the point person for questions and concerns (or a few people if your company is large enough). If at all possible, try to select someone other than their direct manager. Why? Some people are uncomfortable bringing up concerns to the person who is responsible for writing their performance reviews. You may get more honest conversations if you keep this in mind.

Give them the ability to manage their time.

The biggest adjustment for newly nonexempt workers will likely be the actual act of tracking their time. If you already have time-tracking procedures for hourly employees, evaluate whether these are appropriate for salaried workers too. If they are, plan on training them on these procedures before December.

If you haven’t invested in electronic time clock software, now might be the time. The freedom and flexibility it will give your salaried employees may make it feel less like “punching the time clock,” and it could help ease fears of a demotion. It can also make it easier for you to keep a record of their time for reporting or audits. Plus, you can set up overtime alerts for supervisors.

Yes, shifting salaried workers to time tracking can cause cultural complications, but a clear communication plan can make it easier. Empower them with the information they need and flexible time tracking technology to make it easier. If you want to talk about your time tracking setup, we can help.