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Clarity is Key in Reclassification

By June 25, 2024July 15th, 2024No Comments

The first phase of the newly increased exempt salary requirement went into effect on July 1, 2024. Below are a number of things to keep in mind as you communicate with your staff who are impacted by this legal change.

Addressing the “Why” of Reclassification

First, it is critical to explain the reasons behind reclassifying employees to nonexempt status due to new overtime rules.  This will help with morale, trust, and engagement.

Explain that the change in the employee’s classification is being driven by new legal requirements, not a change in the organization’s policy.  Reiterate that reclassification is about legal compliance, not a reflection of employee performance.

Explain the Implications

Outline a clear timeline for the implementation of the new overtime rules.

Employees may question why their salaries aren’t increased to meet the new threshold. It’s important to clarify that the rule does not mandate raises, and exempt work can still be classified as nonexempt.

Be aware of any benefits exclusive to salaried exempt employees and address these with affected workers.

Address Concerns

Many employees may need help understanding why their status needs to change. Reclassification can feel like a step back in their career, even if their duties remain unchanged. In many cases they will be doing the same work but now have to track hours and possibly limit overtime. Exempt employees often take pride in their salaried status and may feel demoted when reclassified. It’s important to empathize with their concerns and provide support during this transition.

Take Steps to Minimize the Impact

Tailor key messages for affected employees, managers, and HR teams and provide multiple training sessions, especially close to the implementation date.

You may want to provide additional training on managing time and attendance for managers not used to overseeing nonexempt employees.

Consider implementing exception timekeeping for employees with fixed schedules, so they only need to report deviations rather than clocking in and out daily.

Continue to emphasize the organization’s commitment to the well-being of its employees to seek buy-in.

Communicating Amid Potential Lawsuits

As in recent years, it is possible that this new rule, and the second half of its implementation in 2025, will face challenges in the courts.  Legal challenges to the rule have the potential to complicate communication. If the organization plans to implement changes regardless of court outcomes, keep the message clear. If the outcome may affect the decision, communicate that clearly and in writing to employees. Avoid mixed messages, as they can erode trust and engagement, especially for those expecting a pay increase.

We know this is a challenging situation for many, and we at HR Services are here to support you and your organization through this and future HR challenges. Don’t hesitate to reach out to us at or (800) 358-2163Also, our Resource Library has additional resources on this topic and other areas of HR.

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For more than 40 years, 501(c) Services has been a leader in offering solutions for unemployment costs, claims management, and HR support to nonprofit organizations. Two of our most popular programs are the 501(c) Agencies Trust and 501(c) HR Services. We understand the importance of compliance and accuracy and are committed to providing our clients with customized plans that fit their needs.

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The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources.

(Images by Freepik and Jcomp)

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