How will the new overtime rules affect workplace flexibility? Not well.

Day 2: Now THIS is what I call telecommuting...

The slow death of the 9-5 workday, together with the arrival of the new FLSA overtime rules, which do into effect on December 1, could create one of the bigger wage-and-hour pitfalls for employers in 2017 and beyond.

Less flexibility to complete work outside of normal work hours.

A few months ago, both The Washington Post (here) and SHRM (here) ran stories about how the new overtime rules could limit job flexibility. Citing a SHRM survey, The Washington Post story noted that 67% of HR pros thought the new regulation would decrease workplace flexibility and autonomy.

These survey results to do not marry well with the latest survey from CareerBuilder, which found that nearly half of workers ages 18 to 24 keep working after business hours, with just over 40% checking and answering work emails outside of the office. A higher proportion of workers in age groups 45 to 54 (65%) and 55 and older (61%) agreed that the typical eight-hour work day was a thing of the past.

What are your options as an employer?

According to the DOL, you have at least three:

  • Raise salary and keep the employee exempt from overtime: Employers may choose to raise the salaries of employees to at or above the salary level to maintain their exempt status, if those employees meet the duties test (that is, the duties are truly those of an executive, administrative or professional employee). This option works for employees who have salaries close to the new salary level and regularly work overtime.
  • Pay overtime in addition to the employee’s current salary when necessary: Employers also can continue to pay their newly overtime-eligible employees the same salary, and pay them overtime whenever they work more than 40 hours in a week. This approach works for employees who work 40 hours or fewer in a typical workweek, but have occasional spikes that require overtime for which employers can plan and budget the extra pay during those periods. Remember that there is no requirement to convert employees from salaried to hourly in order to calculate their overtime pay!
  • Evaluate and realign hours and staff workload: Employers can ensure that workload distribution, time and staffing levels are all managed appropriately for their white-collar workers who earn below the salary threshold. For example, employers may hire additional workers.

And while the DOL emphasizes that, nothing in the new rules would hamstring an employer’s ability to control when employees perform work, the DOL isn’t exactly throwing a pity party for employers who have non-exempt employees who perform work outside of traditional business hours.

So, how can you manage a great number of non-exempt employees who want more workplace flexibility?

As a corollary to the three options listed above, employers will need to re-think their rules on non-exempt employees performing work outside of business hours.  This must include, among other things: (a) whether to permit it; (b) the circumstances under which it will be allowed; and (c) how to track those hours. Frankly, the framework isn’t much different than it is now, except you’ll need a wider net to catch your share of the millions of additional employees who become non-exempt on December 1.

Or, maybe, the new rules will strike a blow to workplace flexibility.

Updated:
  • We need policy that helps small organizations grow and encourages the addition of more employees. With over 95 Million people out of work, this new program although perhaps well intended, hurts business growth. Couple this with the ACA and it is a recipe for disaster.