Navigating the New Overtime Regulations: Can you classify people in same position differently?

If you are in HR, about all you’ve dealt with in the last few weeks, maybe even in the last few months, has been how to handle the new FLSA overtime regulations.  As one of our excellent advisors with Horizon Point, Nancy Washington Vaughn, wrote in a previous blog post about how to navigate the new regulations, “On December 1, 2016, the federal annual salary threshold for white-collar employees exempt from overtime pay will increase to $47,476 from $23,660.”

In dealing with this from a consultative perspective, an interesting question came up with a client recently.  Can you classify employees under the same job title and job description differently?

My gut response, was no.  You classify positions, not people.  In fact, our best practice job description template has at the top of it a field for classification in which the position is indicated as being exempt or non-exempt.

But upon further investigation, you in fact, can classify people under the same job description, differently, in relation to considering whether or not they meet the threshold for exempt status (in addition to considering the duties test related to the roles).   Here are some reasons that may effect their pay and therefore warrant different classification:

1. Part-time versus full-time
2. Experience
3. Performance

But employers should proceed with caution.  As Paul DeCamp, an attorney with Jackson Lewis in Reston, Virginia said in this SHRM article,“Because any differential in compensation details can seem unfair to employees and thus invite scrutiny and potentially a claim, such as for an equal employment violation, it is important that employers be consistent in how they draw any such lines and that there be a clear and well-thought-out business reason for any pay differences.”

Much of what I have read from various sources suggests distinguishing those who fall into different classifications based on pay in the form of levels as to minimize questions and scrutiny.

 

What is giving you the most heartburn over the new regulations?

 

You may also find beneficial: 5 Steps to Efficiently Navigate the New Department of Labor Overtime Regulations