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New Overtime Rule Effective January 1, 2020

Here’s what you need to know about the change:

The current minimum wage for North Carolina hourly workers is $7.25 per hour, the same as the federal minimum wage. For exempt employees, employees who do not get paid for overtime, but are paid a salary, the minimum amount you must pay is increasing on January 1, 2020. This amount is often referred to as the salary threshold.

What is the change?

The current minimum salary requirement for an exempt employee is $455 per week. On January 1, that amount increases to $684 per week or $35,568 annually. This is a much-anticipated change and will likely affect many employers and workers.

What should I do if I have employees who are exempt from overtime and don’t make $684 per week?

Employers have a couple of options come January 2020:

Option one is to change the way those workers are paid. Employees who are currently being paid a salary (exempt from overtime) can be changed to an hourly wage and pay overtime, equal to one and one-half times their hourly rate, for hours worked over 40 in one week.

Option two is to continue to pay the employee as exempt with no overtime and increase the wage of those employees to at least $684 per week or $35,568 annually.

There are a few considerations in making this decision.

  1. How many hours per week is the employee actually working, and if you paid time one- and one-half times their hourly rate for every hour over 40, what is the cost of making this change?
    1. Keep in mind that their hours worked may increase or may be more than you anticipated if the employee is not managed appropriately.
  2. If the employee is taking work home, answering emails or taking calls from the company during off-work hours, it could have an impact on the business and the employee’s pay as well.
    1. Will the employee be willing to take those calls or answer emails if they are no longer a “salaried employee?”
    1. What is the loss for the company if they don’t?
    1. If the calls are more than a few minutes, the employee must be paid for that time. What will be the impact of that payment?
  3. Often, there is a status associated with not having to clock in and out. That status may translate into the employee taking more ownership for their job. There is value in that ownership, even though it may be difficult to quantify. 
  4. Changing a salaried employee to hourly may increase the risk of losing a highly valued employee, and in this tight labor market that may not be a risk you want to take.

Here is what has not changed that employers don’t always realize until it is too late and are issued fines and penalties for not complying:

  1. Employees must meet the qualifications set forth in the Fair Labor Standards Act to be paid salaried, exempt from overtime. Employers cannot pay employees the minimum amount (on January 1, $684) and not pay them overtime. The job must meet the qualifications AND the salary must be at least the minimum. More information here: https://www.dol.gov/whd/overtime/fs17a_overview.pdf
  2. Employers who pay employees on a per piece or per job must record the hours worked for the workers and be able to prove to the Department of Labor that the employee is being paid at least minimum wage plus overtime for hours over 40. https://www.dol.gov/whd/regs/compliance/whdfs23.pdf
  3.  Employees cannot volunteer for their employer. Worked hours must be paid.
  4. Employees who are available to answer the phone or wait on a customer while they are eating their lunch must be paid for that time even if the phone never rings or the customer never shows up.
  5. Employees who are traveling from job to job during the course of their workday must be paid for the travel time. https://www.dol.gov/whd/regs/compliance/whdfs22.pdf

For more information on these and other HR questions, please contact Cristy Carroll, Wise HR Partnerships at 704-650-8684 or email me at cristy@wisehrpartnerships.com.

What are you tolerating from your employees?

Are you ignoring or procrastinating about confronting your employee about their behavior or their performance? Maybe the employee is going through a difficult time or their performance has gradually started to downhill or you are telling yourself that this is a tough labor market and you are afraid that you will not be able to replace the employee. It could be all three, but nonetheless instead of fixing the problem you are tolerating it.

While you continue to tolerate the behavior, consider these reasons to act.

  1. The poor performer is negatively impacting your business and you have a responsibility to react. Likely you AND your other employees are working harder as a result. Someone is taking up the slack for the poor performance. If the problem is the bad behavior of the employee, you are probably spending time making excuses to other employees or to yourself for why you are not doing anything to fix this problem. When the frustration at work goes up, everyone is impacted negatively.
  • You may be able to fix the problem! The employee needs to be held accountable and understand the consequences. Once you face the employee with their behavior or poor work product there is a chance the employee will react positively because they don’t want to lose their job.
  • Holding employees accountable can be a big morale booster. When employees see that problems in the company are dealt with, they have more respect for you and the company. They are more excited about their work and their engagement goes up.
  • You will feel better about your own competence as a manager or business owner. Your confidence is critical to your success and you will feel great once you begin to take the right action. A big weight will be lifted, and you will be energized!

Here are some tips on how to confront poor performance and bad behavior from your employees.

  1. Don’t wait. Let the employee know right away when their behavior is not acceptable or that their performance is not up to standard.
  • Be kind. Don’t speak to the employee when you are angry. Cool down but be firm and clear. Ask the employee what they heard you say so that you can confirm that the message was received in the way you intended.
  • Remember the phrase, praise in public, correct in private. When you confront the behavior do so behind closed doors.
  • Use the phrase, “When you xx, the result it xxx, what I need from you is xxx.” When you are confronting the employee. Let them know the impact of their behavior on other employees, the customers and/or the business.
  • If the problem is performance, try engaging in an interactive dialog with the employee designed to work together to fix the problem. Start by asking the employee why they think the performance is not up to standards. You’ll want to make sure they have the knowledge and skills to do the work in case what is needed is more training. It could be that the employee requires fewer interruptions to perform some of their tasks without errors or it could be something else altogether. The point is to investigate the reasons for the performance and determine whether there is a solution. The employee will appreciate your efforts it could pay off for everyone.
  • Document the conversation. The first conversation you have with the employee will be a verbal conversation but needs to be noted in their personnel file and don’t forget to include the date. If the verbal conversations don’t seem to be helping you will need to do a written warning which is signed by the employee and yourself and added to their file.

Take the Pain Out of Performance Talks

What to do when the conversation 
gets difficult…

Managers love to do evaluations when employees are doing great work. It’s typically an easy conversation about how successfully the employee completed their goals last year and setting new goals. Quickly the conversation turns to a pay raise and if your company can afford a pay raise that sounds fair and rewards the employee’s efforts everyone is happy. Unfortunately, all performance conversations don’t go that well. In fact, some performance conversations can be down right painful!

Here are some ideas that might take the pain out of those difficult conversations.

  1. Relax, it will help the employee to relax. And don’t procrastinate – the earlier the conversation takes place, the less frustrated you are likely to be about the poor performance.
  2. Take the conversation to a closed-door conference room or office and eliminate, if possible, any interruptions. This sends the message that the conversation is important to you and to the employee.
  3. Be prepared. Have the employee’s job description, any notes that you have taken from incidents that have happened that lead you to this conversation. Do your homework regarding any training that may be helpful to the employee and be open to listening to the employee.
  4. Look for themes in performance problems, does it look like the employee doesn’t take the time needed to do the work, is the employee not picking up on the details, is there a skill that they seem to lack that shows up in different areas of the work?
  5. Let the employee talk about how they think things are going. Maybe you will find out that they need more quiet time, or time with fewer interruptions. Perhaps they do not have the required Excel skill level required for the job and the lack of knowledge is slowing down the work.
  6. Be specific about the mistakes and low performance. Bring samples and show where this area of responsibility is included on their job description.
  7. Work with the employee to determine if more training would be helpful or if he/she might need outside training. If the employee seems to be doing well in other areas of the job, this might be a good investment of time and training dollars.
  8. Document the conversation. If this is the first conversation you are having with the employee about their performance, making notes for the file may be enough. If it is not the first, you will want to document the conversation as a Written Warning and have the employee sign the document for their file.
  9. Give the employee a little time to improve after the conversation. Sometimes honest feedback is what it takes to get the employee to start to make improvements.
  10. If the employee does not improve within a reasonable length of time, have another conversation – a more serious conversation – about what will happen if the poor performance continues.
  11. Don’t let the personal problems or life circumstances of the employee keep you from having the conversations and making the decisions you need to make for your business. Business decisions are often hard, and managers and business owners have a responsibility to their customers, other employees, themselves, and their families to make the right decisions at the right time.

The ups and downs of working from home. Here are the results of a recent survey…

When I started my business, I thought I needed more structure so that I would focus on work and not the dogs or laundry. Thus, I rented office space and had co-workers who also had their own businesses. I really enjoyed the connections I made there and still keep up with many of them. Did I get distracted? Of course,  but it was different than the laundry, it was because a friend stopped by to chat or internet distractions. The point is, distraction is all around and many of us have to really work at staying focused. So what about working from home verses working in an office, are we more productive? We don’t have to travel on hwy 77, that’s a gift! Another gift, we likely don’t have to dress the same, we can wear our comfy, usually less expensive clothes.

Is it a good idea to offer a work from home option for your employees? Some of us believe that we can’t supervise our employees unless we share the same space? Is that really true? Can’t we measure productivity based on work results from home or office? And what about our ability to recruit quality workers in this increasingly more challenging time? Robert Half did a survey this month and when they asked professionals if they are more likely to accept a job offer if there was a possibility of telecommuting at least some of the time, a whopping 77% of them said yes! Let’s face it, when the unemployment rate is this low, we need a way to entice applicants. Here is what else the survey said.

Here’s the downside to telecommuting:

Some workers will abuse the situation, 22%

Working from home leads to feelings of isolation, 22%

Leads to poor co-worker relationships, 17%

Complaints of less facetime with executives, 12%

There is no one to bounce ideas off, 7%

Companies save a lot of money on office buildings but may pay another price. What stands out for me with the results is a lack of identified company culture and with the lack of connection comes the lack of loyalty to the company. We’ll see what happens with this newer phenomenon of working from home, will it stick or is it a fad?

Copyright 2020 Wise HR Partnerships

704.650.8684 | 442 S Main Street | Davidson, NC 28036