Monday, September 1, 2014

Is the Salary Really Greener on the Other Side of the Fence?

The right and wrong reasons to go from non-exempt to exempt

As a department head and an HR professional, one of the most frustrating, yet all too common questions I’ve gotten from managers is the casual request to switch one of their employees from hourly (non-exempt) to salaried (exempt).

Although often used interchangeably, “salaried” and “exempt” are not the same thing, just as “hourly” and “non-exempt” are not the same. For the purposes of this example, the terms will be used to convey the common concepts – a more detailed clarification appears at the end of the article.

Now, many managers (even many reading this) don’t understand why that simple request could lead to a frustrating exchange with human resources (“… isn’t there just a form or something? …a payroll switch to click?) Of course, management pros know exactly where this dialogue is headed.

Imagine the conversation goes something like this…
Team Supervisor: Hey, you got a minute?
Human Resources: Sure, have a seat.
TS: (remaining standing) I just wanted to put in for Diane to go from hourly to salary. What do I need to do to make that happen?
HR: Oh ... are you promoting her to that floor manager job?
TS: No, no. We’re actually putting that on hold. I just want to make her salaried.
HR: Oh, so she’s taken on more responsibilities? Tell me about her new scope of work…
TS: No, no, no. Same job, I just want to change her classification.
HR: I don’t understand. If you didn’t change her job and you didn’t change her scope of work or responsibilities, what’s prompting the need to change her pay classification?
TS: Well, I’m just tired of trying to work around the over-time thing. Our department is really busy right now but if I let her work over-time, we go over budget. If I make her go home, we get behind. She’s willing to put in the extra hours, I just can’t afford the extra pay. So if we make her salaried – problem solved, right?
HR: Well...