Peer to Peer Magazine

September 2011

The quarterly publication of the International Legal Technology Association

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CONSIDERING A CHANGE FROM NON-EXEMPT TO EXEMPT by Annette Shewmake Lavigne, Director of Technology at Stinson Morrison Hecker LLP T he decision to classify a job or position as exempt should not be made lightly or without proper consideration. It is a decision that should take into account not only human and financial resources, but the law. THE LEGAL ASPECT You want to be clear on whether a job meets the Fair Labor Standards Act (FLSA) guidelines for various exemptions such as executive, technology or professional. Your Human Resources department can be helpful in this regard. Published job descriptions should meet the FLSA requirements, and the primary duties of employees performing those jobs need to match the job descriptions. You don't want a lawsuit for failure to pay fairly, so don't hesitate to involve an employment attorney. FINANCIAL CONSIDERATIONS If you have made a legal determination that a position is exempt, you also have to take a look at the financial considerations. It might be more cost effective to increase the number of staff or implement a shift schedule to avoid overtime. You might also consider using contract employees for more highly skilled tasks or when overtime hours peak. KEEPING VALUED STAFF HAPPY One of the most difficult aspects of moving a position to an exempt status is the human aspect. How do you take people who have previously been eligible to receive overtime pay, reclassify them as exempt, and create an employment situation that is still acceptable to them? You don't want to lose a valued member of your staff and then spend twice that person's salary advertising for, interviewing and training a replacement. THE PROBABILITY OF PROJECTS Economic trends have demanded that we all do more with fewer people, so your staff could be feeling a little stretched already. Determine if you need to make salary adjustments when you reclassify a position as exempt. Keep in mind, the speed at which technology changes and what those technology changes could mean in terms of the number of projects you complete over the next few years. How will those projects affect the hours your employees work? DEFINING SALARY AMOUNTS Below are some of the elements you will want to look at in making a determination about salaries: • Projected Overtime Hours: Can you predict with any reasonable accuracy the number of overtime hours your staff will work? Again, you have to keep in mind that technology has to run at the same speed as your business or the business of your clients. This can affect the number of hours your staff works. • Documented Hours: Find out the previous overtime history for employees in these newly-exempt positions and whether it has been consistent. • Job Market: Find out how your current salaries compare with similar exempt jobs in your area and your industry. If you make a change, you want to make sure employees will be paid fairly based on the job market, their own skills and their tenure with your firm. COMMUNICATING CHANGE AND EXPECTATIONS Finally, it is important to communicate to your staff that job classification changes will be happening and what these changes mean for them. Offering a more flexible schedule can go a long way in helping staff see exemption as a positive change. If you intend for employees to continue to punch a time clock and work a regular daily schedule, be clear about that, too. Be clear about all of your expectations so that each person feels like he has been fully informed and has all of the information necessary to make informed personal and financial decisions. ILTA 60 www.iltanet.org Peer to Peer

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