Last week we discussed the proposed overtime rule that’s expected to be approved next year, which basically says that if an employee is to be exempted from overtime pay –commonly referred to as “being salaried”– then their salary must be at least $50,440.  I also described a few pay options for keeping payroll expenses under control.    But for employees, this is not entirely about money, it’s also about perks, perception and prestige. 

Meet Paul, he’s a 30-something professional making $42,000 a year.  He enjoys some schedule flexibility, doesn’t have to worry about clocking in and out,  can take a long lunch if needed and is free to stay late to finish a report or hang around with colleagues.  He also works from home over the weekend, catches up on emails or gets a head-start to the weekday.  Sounds normal for the average professional, right?

But, if the proposed rule goes into effect, and his employer (to avoid giving him an $8,000 raise) re-classifies him as hourly, he will no longer be able to do any of those things.  Of course, factually, reclassification to hourly is a good thing for Paul.  He will be going home on time, he’ll have freer weekends and if a special project requires working long hours, he will be paid overtime, which means more money in his pocket.  But, because human beings are complex Paul will not necessarily see this as a good thing.  In my experience, when employees are reclassified to hourly they often feel like they’re being devalued or even demoted.  They feel like they lost flexibility and autonomy which many view as perks. They resent having to track their hours, and feel micromanaged, almost mistrusted.  This was a surprise to me as an HR rookie, when I naively thought an employee would be happy to be re-classified, but no.  To manage this perception of loss it’s important to inform employees and give the full picture on reclassification.  It doesn’t mean they’ll be happy, but it will help them understand the context.

 If the proposed rule goes into effect as planned and you know any of the 5 million workers who may be affected, you can do some balanced research at the Department of Labor and the Pew Research Center.

© Copyright Eva Del Rio

Eva Del Rio is creator of HR Box™ – tools for small businesses and startups. Send questions to Eva@evadelrio.com