Exempt or Non-Exempt?

To be exempt or not to be exempt; this seems to be a tough question for many HR professionals these days. The Fair Labor Standards Act was established back in 1938 to grant overtime and better work wages when industrial jobs were pervasive in the market. It could not have come at a better time as jobs back in those times had very low wages (relative to the cost of living I suppose one can argue) and very poor working conditions. 

One cannot be categorized as Exempt from the protections of the Fair Labor Standards Act without meeting the required duties test as well as the salary guidelines. There are many opportunities for someone to fall outside of the protection of the FLSA; those individuals would fall under the administrative, professional, executive, outside salespeople, highly compensated employees as well as Computer employees. Those who do fall under the protection of the FLSA are required to get time and one half of their hourly wage for each hour of work over 40 hours a week.

I’ve seen both sides of the fence, and know clocking in and out is a hassle. It is definitely nice receiving time and one half for each hour over 40; however, most companies don’t let employees work overtime unless they get prior approval. I don’t know of many companies out there which let employees work large amounts of overtime without approval. I have worked for a company which was short handed all the time, so I was able to put in more than 40 hours each week. If I can advise any employer about overtime, it is they must pay the overtime no matter what. However, they can most certainly discipline the employee for working overtime without approval. 

In a time when budgets are tight and employers are cutting overhead each day, the United States Government’s response to President Obama’s Executive Order to update the salary basis test portion of the FLSA could not have come at a worse time. I can most certainly understand because increasing managers salary from the miniscule $455 per week minimum to the new $970 per week can put a lot of employers in a pickle. On the flip side, the $455 per week is an extremely low and outdated number. I don’t know of many individuals who can live off of a wage this low. I’m sure individuals manage, but I would absolutely agree and support an increase in wages for the exempt individuals. 

If those employers whose employees are currently exempt from FLSA protection cannot be moved up to the new salary of $50,440 per year, it is also an option to pay those employees time and a half for hours worked over 40. It would seem contradictory for an employer to pay overtime to someone who is exempt in nature for their duties and this could easily bring any employers classification practices into question for the rest of their positions. 

The question can be asked if supporting this new increase would help, or if it would hurt. I think it could be extremely beneficial for large employers who can afford the changes in their budgets. For smaller companies, they will most likely struggle unless they’re able to make adjustments in their spending (or increase revenues). In a time when employers and small businesses have had to find creative ways to stay afloat, many are having to hurdle the ever-changing regulations passed by the United States Government. 

Hearing both sides of the story can certainly change someones perspective on the matter. I, for one can see the benefit for the employee and the employer, as well as the bad. Employers may decide to downsize (or lay off) workers to substantiate the increase in wages. The employees can suffer through this by loss of a job while the managers are able to get their increase in pay. On the flip side, employers can evolve and require their managers to not work all kinds of hours in the day, not answer emails at night or take phone calls after hours. There are most likely other ways an employer can manage this update in the FLSA, but this blog would be forever in length if we went into the millions of different ways of managing the change. 

In this unpredictable market where consumers are price sensitive, an increase in prices may motivate consumers to go and purchase their goods somewhere else. With the lack of details on when we can expect to see the actual regulation come out, many employers are going to need to sit down with their compensation department and strategically plan their move before regulations come out officially. When weighing the pros and cons of this change in regulation to the FLSA, I would support the much needed update to the minimum salary. I can only hope this does not hurt the economy by leading to layoffs or forcing companies to close their doors. Economic growth is stimulated through spending and business expansion, both don’t happen if employees are being globally laid off from work or if employers are closing their doors. 

What do you think should happen?


Why is Human Resources such a fulfilling career path?

Its a big question on every parent and students mind when they start college. Hundreds of different concentrations and career paths, but really everyone is only meant to chose one or two (maybe three or four if you’re lucky). The struggle is real when determining what one is good at. Self reflection is important at the time of deciding a college career path. I can most certainly speak for myself in why I chose my career path from the get-go.

My father ran a golf business (and continues to do so) for over 20 years, so I figured I would want to do this one day. I choose management because this was something my father had to do everyday. Fast forward 3 years later, I was at a crossroad where I was not sure about my career path. I took a Human Resources course and absolutely loved it. One thing which intrigued me is “it depends” seemed to always be the answer for every situation. Whenever a small statement like this is used, it means there are many factors involved which need to be looked at and assessed.

I decided the Human Resources concentation would be best for me since there were different career paths associated with it. There was payroll, benefits, compensation, employee relations, training and development, recruitment, engagement etcetera. These options seemed just as good in comparision to just Management. I can honestly say I am so happy I picked the HR track because it lead to a fulfilling career so far.

Human Resources is looked at as a bad department or roadblock at times. I’ve been in many different situations where something was not processed or moved through because we had processes and procedures which had to be followed. What was so fun about it was we had control on whether to say yes or no in any circumstance. Of course I learned some individuals would have power to overrule us per se.

I enjoyed working with the difficult and fun employees. The challenge of not knowing what lied ahead really intrigued me. What was fun is discovering the true meaning of human resources. You should not choose Human Resources if you’re not good with people. It requires a certain type of person to handle angry, upset, overly excited or dry people. While the people part of the job is the most important; you have to be flexible at all times. Answering “no” seems to be a thing of the past in the field of HR. One has to look into the situation to ensure all bases are covered before answering.

I was faced with many situations where a question was asked which usually had a simple answer. I would answer and not realize there were other factors involved. A young HR professional will have these moments and have to learn from them. Fast forward 5 years, I realized I would be diligient in all my responses and answer only with absolute certainty. Answering on an assumption or a guess would only put my judgment into question.

I worked as a call center employee in the HR department for over one year, a processor of employment actions (hire to fire) for over four and a half years and eight months as a employee relations representative. Each was an eye opening experience for me. I enjoyed the challenge of having to look into situations and answer with certainty. I enjoyed learning how to document my decision making so I could later explain to anyone who asked about my thought process. Most of all, I loved doing my job.

There are plenty of careers where someone has to look at their watch all day. To me, Human Resources will certainly make the time fly. After over five years in the Human Resources field, I can certainly say I love being involved with it more and more. Of course learning never stopped after college. I decided to get certified by taking the PHR (Professioonal in Human Resources) examination as well as getting into an Executive MBA program. Studying for the PHR was an intense eight months of studying and a grueling 3 hours of testing.

Being certified was absolutely about getting the credentials, but later it took on new meaning. It became a reason to be more professinal, a reason to research more intensely and a reason to always be ethical, practical and legal in all my decision making. Growing up, it was easy to make the right decision; so Human Resources was a good field because it requires honestly and integrity.

Being an expert Human Resources professional is fun, because there are plenty of questions which others can’t answer which I can. Learning about the law is intriguing and ever-changing. In the midst of all this change, there is opportunity for Human Resources professionals to grow and learn. I enjoy doing the right thing everytime not because I have to, but because it is who I am. Human Resources is a demanding field, but one which will definitely continue to see increases in demand for motivated individuals. Hospitals, nursing homes, oil and gas businesses as well as any other large corporation require someone to hire, develop or fire. There is plenty to accomplish in this field and many different avenues to take.

I leave you with this, never quit learning and always find a reason to do a little more research everyday. In the end, you will be more informed about your decisions and create more sound judgment.