06.01.2016

DOL OT Rules? Two Words: Change Management

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People struggle with change. It scares us and makes us feel

What change management looks like... U.S. Army Flickr Creative Commons
What change management looks like…
U.S. Army Flickr Creative Commons

unsettled. Some of us respond to that by getting mad. Some respond by saying “This isn’t fair” which essentially means, “This isn’t what I was expecting.” If you have to change something in your organization, like moving a bunch of people from salary to hourly in order to comply with the Department of Labor’s new overtime rules, you may be experiencing some frustration. Your employees will be experiencing change. The best way to handle that is to create a change management plan.

There are a lot of moving pieces to this thing and you’ve got until December 1 to be totally compliant with the rule, so there’s no need to rush into anything without thinking it all through and having a plan. Here are some best practices you should consider.

1.  Gather the information you need to make this change. For example, you need to know what employees’ hourly rates should be as compared to what you were paying them on salary. You need to know whether you will be better off, from an operational and financial standpoint, if you hire more people and issue less overtime, or if you just pay overtime. You need to know how this will change the roles of managers, accountants, human resources. You need to know how it will affect benefit plans. Before you say or do anything, gather the information. If you promise or suggest a course of action and the information steers you in a different direction, there may be problems to clean up later.

2.    Prepare Yourself for a Variety of Responses. People will be scared, mad, happy, sad. Prepare for all of them.

3.    Be clear about why you’re making the changes. When you get ready to talk to employees, explain to them why this is happening and that you’ve looked at all the options that would be best for them, as well as for the organization. You’ll have to decide, based on your own organization and employee base, whether you want to be transparent and collaborative in the decision making process as it goes along, or whether you want to just unveil the plan once you’ve figured it out. Those are strategic questions each group will have to answer individually.
4.    Look for liability issues. It could be that you’ve been paying people incorrectly for a while and bringing this out now will draw attention to that. In fact, you might wind up opening several cans of worms in terms of how you compensate employees, allot hours and so forth. That brings me to my fifth point….
5.    Prepare to hire experts. You may need an employment law expert to help you if you’ve been paying employees salary when they were hourly. You might need a benefits expert to help you transition benefit plans. You might need an HR expert to help you figure out how to configure employee hours and help with your change management plan. Put a little cushion in the budget to hire some experts because if there is much backlash, or people leaving, that will be far more expensive than hiring outside consultants to steer you safely through the process.
I don’t want to sound doom and gloom. Some employees might be thrilled at the prospect of getting overtime. Your employees might see themselves as your allies in a situation where the federal government made a change and you’re just being a good corporate citizen. But it will all shake out much better if you think it through first. And if you want help, give us a call!

We work with companies on a project basis or on retainer, providing a custom level of HR help designed for your business, with offices in Austin, San Antonio, Dallas and Houston. Contact me at Caroline@valentinehr.com or call (512) 420-8267.

We work with companies on a project basis or on retainer, providing a custom level of HR help designed for your business, with offices in Austin, San Antonio, Dallas and Houston. Contact me at Caroline@valentinehr.com or call (512) 420-8267.