DOL December Overtime Law! …5

To empower others, you must take their measurements regularly…


Post 5: In preparing for the Department of Labor updates of December 1st, Sharon and Josh awaited the manager meeting.  They hoped to learn more of how the company’s performance-management practices might impact employee receptiveness to the compensation changes.

In the meantime, their boss requested an update; they shared the details of their interview with the labor law attorney and the data they had requested regarding the company’s current compensation realities.  After confirming his confidence in their direction, their leader offered them two avenues of support.

He first offered the support of the finance department.  Finance would work with each group of leaders, look at current realities and adjustment options, and then run analyses to ensure best results and evaluate financial risks to employees, teams and the company objectives. So, they would align the actual compensation-adjustment strategies to each department.

He also offered to help Josh and Sharon flesh-out their current ideas enough to offer them to the finance group as a foundation for the compensation changes.  This was a huge relief to his two novice leaders, who eagerly accepted both offers and immediately gave him a copy of their collected ideas:

 Strategies for Adjusting Compensation

  • Increase minimum salary where needed to preserve exemption for overtime
  • Adjust salary pay to hourly pay rates, if there is historical low rate of overtime
  • Convert current salary to hourly structure and pay overtime premium compensation
  • Concede nonexempt status requirement, convert and manage overtime liability
  • Reduce hours in work week to forty and plan to hire more people

Resulting Changes to Consider

  • Restructure overtime-usage and management expectations: new policies on employees self-managing, planning, gaining approval, tracking, or abusing overtime
  • Restructure scope of work to actually move majority of the time-eating work (creation, judgement, responsibility, etc.) to the fewer salaried personnel
  • Restructure jobs to fit within a 40-hour possibility
  • Align performance tracking to include time-used and support efficiency expectations
  • Consider a regular, non-discretionary bonus system for performance directly linked to revenue to feed increase of exempt pay (can be considered up to 10% of salary).

Strategies for Managing Performance Impacts

  • Allow employees to track & manage a set number of OT hours as part of their performance management
  • Train efficiency and effectiveness skills, practices, and habits
  • Reward efficiency and effectiveness ideas and performance
  • Use part-time or intern solutions for tasks that are able to be delegated and removed from the duties of formerly exempt employees
  • Build efficiency into ALL possible team processes: document them, measure them, hold team accountable for using, and reward improvements
  • Celebrate measured progress on new practices and positive results
  • Create fluctuating schedules to mirror work-demand and reduce required overtime

Reality: Every change should be examined through a lens that identifies aspects of the business that foster natural resistance.  Processes and routines should be adjusted to encourage the consistent practice of specific new behaviors and accountable measuring of them.

FOLLOW US & don’t miss the next PEPPERBOX blog:  What will these two leaders learn when their colleagues are honest about the number of hours their exempt populations really work and how that performance is managed?

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