When "Salaried" Status is a Status Symbol

by Mammoth Team on July 21, 2016


Like an expensive car or designer clothing, being an “exempt” employee carries a certain amount of status.

With newer broad overtime rules, you may be looking at reclassifying some of your exempt employees as non-exempt. And that could result in some resentment.

For example, they’ll likely be required to track their time; something that they may feel is beneath them. Or they could feel they’re being micromanaged, that their position has less prestige, or that their work has less value. All of this is understandable; so how can you effectively address these concerns?

How it all started

It’s important to remember that exemptions to the FLSA’s minimum wage and overtime requirements were created as a benefit to employers, not as a reward to recognize employees for their achievements. Being exempt certainly has its conveniences for employees: they usually don’t need to track their hours, they generally have more flexibility, and they’re paid the same regardless of the quantity or quality of their work. But it also has a major drawback: exempt employees aren’t eligible for overtime pay when they work over 40 hours in a workweek.

It’s not about performance

When you communicate with employees about the transition to non-exempt status, be clear that the change has nothing to do with their performance or their importance to the company. Rather, it has everything to do with complying with the new overtime rules. The classification change is not personal, and likely impacts a number of employees in the workplace. You might also take this opportunity to praise their work and tell them you value and appreciate what they bring to the organization. Give specifics. These employees may feel down about themselves. You can help by building them up.

So don’t make it about performance

Your words may sound hollow, however, if your business culture puts exempt employees on a higher pedestal. It’s one thing to recognize the merit of individual exempt employees. It’s another to imply that exempt status itself signifies greater value. Becoming exempt isn’t like becoming partner in a law firm or receiving tenure at a university. When an employee receives a raise or a promotion and thereby becomes exempt, focus on the job well done or on the new duties—these are the things worth celebrating.

Be flexible about flexible schedules

Finally, if you allow your exempt employees flexibility with their schedules, allow the same for the non-exempt employees when possible. Time tracking doesn’t have to mean rigid schedules or micro-managing, and for those who have been reclassified because of the new rules, maintaining a perk like scheduling flexibility can help keep morale high.

Studies show that employees consider vacation time and workplace flexibility one of their most valuable benefits – second only to health insurance.

This guide will help you understand how to structure and implement a time off policy that works for your organization.

Get the Guide

Topics: Culture, Wage & Hour

Recent Posts