The Perceived Status of FLSA Status

The FLSA and exemption status is Compensation 101.  If there is nothing else you do as a Compensation professional, you’d better know how to classify a job as exempt or non-exempt.  But of course it can be challenging to make sure that all jobs are properly classified.  The first challenge is usually the unwillingness to pay overtime, which often comes from supervisors who are trying to manage their budgets.  Another challenge can actually come from employees themselves.  We all might think, “of course this person wants to be non-exempt and get paid overtime.”  But then we get someone at our door complaining that they’re not valued enough, that we obviously don’t hold their position in very high regard since they’re not exempt.  There’s a perceived elevation in status with an exempt position.

The perception is not totally unfounded, one of the qualifications for the administrative exemption is the “exercise of discretion and independent judgment with respect to matters of significance.”  So generally a position is more important to an organization if it qualifies for this exemption.  All positions are important and necessary, or they wouldn’t exist (especially in this market), but not all positions have the authority to make important decisions about the business.

So how do we help employees to feel better about their classification?  I think it goes back to the basics:  communication, effective leadership, and appreciation for good work.  Realistic communication about the job aided by a sound job description can help the employee to understand the role.  A good leader values their employees regardless of their level and makes sure that their employees know they’re appreciated.  A good leader also works extra hard to provide recognition for good work.  Even if there is still some concern about the “status” of non-exempt positions, employees who feel appreciated for what they bring to the organization will always be more content and productive.

Darcy Dees works as the Compensation Manager for Rock Bottom Restaurants, Inc., headquartered in Louisville, CO.  She has been working in Compensation for over 5 years now and recently attained her Certified Compensation Professional (CCP) designation.  She spends what little free time she has hiking and reading.

Comments

[Chris Kelley]

Darcy, you're right about FLSA determination being a Comp 101 thing...or at least it should be. Unfortantely, I've had more than my fair share of having to unravel tangled messes left where folks have made inaccurate determinations.

Most annoying has been the sheer lack of any notes or documentation as to why the decision was being made one way or the other. That was why we added that as a key feature in our KnowledgePay software.

Might be worth mentioning to your readers about the great resources available from the folks at the DOL. For a good time, spend an afternoon reading through some opinion letters to see if you agree.
http://www.dol.gov/esa/WHD/opinion/flsa.htm

[Michael Haberman, SPHR]

I find this to be a major area of confusion for many companies, both non HR AND HR alike. The DOL website does provide alot of guidance, but like most things, there are alot of gray areas and interpretation is often in the eye of the beholder. You just need to make sure your decisions are well documented on why a position was selected to be an exempt position.

[Devoted Compensation Professional]

Nice article, I also agree that the DOL opinion letter database is a great read.