The Overtime Work Rule is on Hold—Now What?
Whether you voted blue, red, or otherwise, hourly workers and employers are anxious to see what changes the new administration will make and how these changes may affect our industry. And while we can’t be totally sure what the next four years will actually bring, we do know one thing: change is coming.
On the campaign trail, we heard a lot about the gig economy and listened to candidates debate topics like worker benefits and creating more jobs. The president-elect was very clear: he believes the government has imposed too many regulations on businesses, particularly as it relates to the new overtime work regulation.
For those not up to speed, the overtime pay regulation, which proposed hourly workers be eligible for overtime pay when they put in more than 40 hours a week and earn less than $47,476 a year, was set to go into effect on December 1, 2016. During his campaign, Trump often stated that he would delay the overtime regulation and make specific changes to it for small businesses to adjust. Fast forward to November 2016 when a federal judge blocked the rule and sided with the plaintiffs who said it would cause an uptick in state government costs and eventually lead to layoffs. So where does that leave employers? Unfortunately, in a state of limbo until the federal government reaches a final decision.
Or does it? We recently polled more than 1,000 service-industry employers on hot legislative topics like the new overtime work regulation and how they would respond to the new regulation. Here’s what they said:
- 37 percent do not plan on making any business changes
- 28 percent plan to give their workers a small raise sothey no longer qualify for the overtime pay threshold
- 22 percent plan to decrease worker hours to no more than 40 a week to avoid overtime pay
- 13 percent plan to decrease base salaries to offset any overtime pay they could potentially make
Following the November ruling, it appears most employers are moving forward with their planned changes regardless of the block. And while we cannot predict the future, we can look at the facts and help equip hourly employers with tools to navigate uncertainties and tackle any potential legislative changes. Here are some basic tips:
Talk to Your Workers
Most employers knew about and were prepared for the overtime work rule to go into effect December 1. Workers on the other hand, seemed much less informed, and now, with things on hold, they might be even more out of the loop. As it stood, the new overtime work regulation was going to impact 4.2 million workers, which means employers have a lot of people to talk to. Have honest and frank conversations with your employees, especially around your plans and how their hours might be affected. This will not only open the lines of communication and build trust, but it will also help your workers better prepare for the future.
Examine Your Workforce Management Tools
On average, managers spend about 25 percent of their time scheduling workers and dealing with related issues. And 35 percent of Millennials quit because of inconsistent scheduling, according to Excellence Essentials. Make changes to prioritize your time, increase employee retention and prepare for a larger team with a robust scheduling tool. By implementing a robust mobile scheduling tool, you can optimize employee shifts, facilitate compliance, optimize labor costs and increase visibility and moral for the workers.
Reevaluate Your Hiring Practices
Ensuring you always have great workers when you need them involves staying on top of your hourly hiring and comes down to your ability to quickly find and hire the right talent. To ensure this, employers need to take advantage of mobile and other emerging digital tools. We found that 90 percent of workers look for jobs on mobile devices, but only 54 percent of job applications even work on a mobile device, creating major pain points. Making mobile applications super easy to submit and responding to them promptly will help you stand out.
The Bottom Line
Although we don’t know how the overtime work regulation will ultimately take shape, employers should start conversations now and regularly update their workers so that both parties are prepared for the final decision—whatever it may be. With Republicans controlling the White House and Congress (and soon the Supreme Court), it’s likely that business-friendly policies will prevail in the near term. That said, we should also expect actions that will boost hiring. At the same time, these actions will reduce the size of the U.S. workforce and make an already stressful labor market even more challenging.