FLSA compliance - the challenges of getting (and keeping) positions appropriately classified - are difficult enough. HR and compensation professionals everywhere can attest to this. So why would we make the task even harder by "rewarding" FLSA exemption?
Allow me to explain. One of the struggles faced by HR and compensation pros in their efforts to do the right thing FLSA-wise is the counterpressure brought to bear on the process by employees and their managers who regard the "exempt" designation as a status indicator, an acknowledgement of their professionalism or even (yes, take a moment to appreciate the irony) a door to making more money. Where do they get these crazy ideas? From us, of course. Because we design programs and policies that reward exemption status by making it a hurdle that must be crossed in order to get better pay or benefits. For example:
- We provide a higher level of benefits (e.g., more PTO or vacation days) to exempt employees.
- We make exempt status a criteria for incentive plan participation - or for a higher tier of incentive opportunity.
- We create an artificial salary ceiling for nonexempt employees by reserving certain salary grades for exempt jobs only (e.g., Grades 1-9 are nonexempt, Grades 10 and up are exempt...).
I do appreciate the fact that at least some of these practices may have been established with an eye toward compensating exempt employees for the loss of overtime; however, in my experience they create many more problems than they solve.
Let's make FLSA status purely about compliance with labor law, and let's not allow our plans and practices to broadcast messages that say otherwise. If you must limit eligibility for your reward plans, consider finding a legitimately business-related criteria to use instead.
Are you with me?
Creative Commons photo "surprise" by arnichka
Completely agree and would recommend not tying any specific program or reward system to FLSA status alone if possible. Why add more confusion or give the wrong impression to staff? I've got my pitchfork ready, where are we marching? :)
Posted by: Abe Hayes | May 17, 2019 at 10:23 AM
Abe,
I appreciate your enthusiasm for the cause!!
Posted by: Ann Bares | May 18, 2019 at 05:15 PM