Telecommuting and flexible working options are becoming more and more popular among employees. A recent survey shows that most employees would take a pay cut if given more flexible work options – employers are listening.
FlexJobs surveyed employees in 2019 and found that a whopping 74% of respondents believe flexible working is the new normal. They found that between 2005 and 2017, remote work increased by 159%. Additionally, in 2015, approximately 4 million U.S. workers were working remotely. Today that number is at 4.7 million, which is about 3.4% of the population.
As remote starts to pick up speed, employers may begin rethinking flexible work options. Why? Because of new overtime rules.
The Department of Labor finalized new overtime rules on Sep. 24, 2019, increasing the salary-level threshold for white-collar exemptions to $684 a week from $455 a week. This means that workers who don’t earn at least $35,568 a year ($684 a week) would have to be paid overtime.
With the new overtime rule, employers will suddenly be required to pay overtime to many more employees, causing potential stress on their business financials.
The new rules don’t just impact employers. Remote employees are accustomed to the flexible workday. They don’t always track their hours and often don’t even work specific schedules. As long as they complete assigned work and meet deadlines, their actual hours don’t matter. But, under the new overtime rule, this way of working can spell trouble.
In this article, we’ll cover how the changes will impact your business and employees. We’ll also include some ways to make adopting the new overtime rule much easier.
Impact on Employees
The easiest way to stay compliant with the new overtime rules is by tracking employees hours through time clock software. By recording hours worked by nonexempt employees, you as the employer can accurately compensate them for their time.
Of course, you probably already know the problem here. When you have employees working irregular and different hours, time tracking can get complicated. Your knee-jerk reaction may be to put remote workers on a schedule or even move some workers back to the office.
Unfortunately, that won’t work. Remote workers are used to their flexible schedules, and you can bet they’re not going back to working 9 to 5 without a fight.
Employees with a flexible work schedule feel more in control, more supported by leadership, and have a better work-life balance.
Impact on Your Business
Now that your employees will begin tracking their time while working, that will be great. Your business will be compliant. But what constitutes “work”? Do you have to pay an employee if they check their email before bed? What if they respond to a message while eating dinner? Do they need to track that time?
Whether employers realize it or not, employees are often connected to their work in some form – even when they’re technically off the clock.
It has been found that most employees feel the need to check emails whenever and wherever they are. That can quickly add up to a lot of overtime – whether it’s documented or not – and can result in inflated labor costs.
What can your business do about irregular schedules?
Even if your employees work irregular schedules, you can set clear expectations of when they should be working. Specifically, which hours they need to be available.
If an employee works remotely some or all of the time, they mustn’t feel pressured to work more hours just because they can.
It would be best if you discouraged employees from doing tasks after hours. Remind them working after hours is not necessary and is in a gray area for compliance. Try not to contact employees during their off-hours so they won’t be tempted to work while off the clock.
Additionally, you should set a clear definition of “work,” so employees know when they need to track time. As an example, spending a few minutes reading over an email might not need to be tracked, but responding to a client might be trackable time.
Monitoring time is critical…
Flexible work schedules and the new overtime rule are at odds. Remote work and other arrangements primarily focus on the work completed by an employee as opposed to the time they put in; the new overtime rule makes time tracking much more critical in the eyes of the law.
Employees who work remotely and set their schedules may work atypical hours – depending on their lifestyle and workload. As long as employees are meeting deadlines and completing their work, employers may not care to monitor their hours. But if your remote workers are now nonexempt, then tracking their time is critical.
It is the employer’s responsibility to track employee hours and make sure they’re paid accurately for their time.
But monitoring employee time isn’t always easy and can be quite risky for employers. Who will be there to stop an employee from checking their email after hours? Employees who are used to working when they want may not even realize they’re working overtime. And that could easily leave employers open to compliance issues and also an audit.
Without accurate time tracking, there is also the risk that employees can claim they worked unreported overtime hours. This risk alone can lead employers to end remote working opportunities. But is that needed? Is teleworking now too risky for employers? It doesn’t need to be!
New overtime rules will undoubtedly change teleworking, but it doesn’t end flexible work options. Policies, clear expectations, and working habits will need to evolve to keep employees happy and employers compliant. Here’s how:
Invest in time clock software
Time clock software is one of the best ways to ensure your employee’s hours are being tracked. Web-based solutions like Buddy Punch allow an employee to easily punch time the moment they start working on a specific task. They can easily switch jobs to ensure they are being paid the correct rate.
As an employer, you can see exactly how much time an employee spent working on a specific task. Being that each punch comes accompanied by timestamps, you can see exactly when an employee was working. With advanced features such as geofencing and GPS monitoring, you can determine where an employee was for each punch.
Additionally, features like punch limiting can help to ensure employees are on the clock during the shift time you’ve specified.
Update time tracking policies
Along with investing in time clock software, you should set clear policies on how employees should track their time. This includes who they should report to if they have questions or an issue with their hours.
Time clock software can make this process easier for employees and employers. It can be used to easily keep track of and remind employees of their working schedules while helping managers keep flexible schedules in order.
No matter the process, make sure all nonexempt workers know how they need to track and report all of their time worked. Be sure to stress the importance of accurately tracking time so they can be paid for their work.