By Deborah Rutledge
When the Department of Labor announced its new overtime rules, attorney Jeffrey Mullins heard a lot of talk over which industries would feel it the most, but not much talk about employer solutions.
So the Taft Stettinius & Hollister partner came up with one, starting with a list of questions he and the firm use to help employers cut through the chatter and get a clear-eyed view of how the rules actually will affect them and their employees.
The questions, many of which are based on input from clients, are designed to help employers get their arms around how big a problem this is—or isn’t—for their companies, says Mullins, who has been digging into this issue for the past nine months.
And although the day is drawing near when the rules take effect, Mullins says employers still have the time they need to analyze their occurrences of overtime and then take the practical steps to protect themselves as they comply with the rules.
Taft Stettinius & Hollister can help devise their plans.
For some companies, like an IT firm with employees earning $50,000—above the new exempt threshold of $47,476—the rules won’t be very impactful. Or, if a previously exempt employee works a 41- or 42-hour week, the impact is less than if that employee regularly worked 50 hours a week.
The practice of analyzing current overtime is similar to what manufacturers did in 2008 when the economy faltered, Mullins says.
“A lot of manufacturers took a hard look at overtime and what it was taking to get jobs done,” then addressed the outlying issues that were causing workers to be idle, leading to overtime later, he says.
Maybe it was machinery breaking or deliveries coming late, but the industry was forced to closely look at the reasons causing overtime in its hourly workforce, and that mirrors what employers are likely to do now.
And now there are many new considerations for what constitutes overtime. For instance, a supervisor who previously never thought twice about the calls or emails he or she took after hours to respond to emergency work issues now may have to track those.
Once employers understand their employees’ overtime incidence and the impact the rules will have on them, they can figure out solutions, like bumping up pay to get some employees to the salary threshold or hiring more employees to spread the work out and sidestep overtime, outsourcing work or changing rates, among other strategies.
But Mullins advises a key step is communicating the plans to employees so they have clear expectations of how it will affect their work life and bottom lines. Some people might expect a bigger gain than they could realize, while others may be taken aback by a new and often unwelcome practice of tracking time.
“If you’re asking salaried people to keep track of their hours, explain to them why,” Mullins says.
Having a communications plan in place to manage employees’ expectations is key to keeping them engaged, he says.