Presenteeism Infects the 2016 FLSA Change Proposal

Followers of the old "presenteeism" syndrome ... faithfully reporting to work even while sick and incapable of functioning properly ... should love the proposed change to the FLSA short test minimum salary floor. Making the pay of more workers contingent on time spent at work will intensify pressure "to be there" and to be viewed "working," whether your presence spreads illness or not.

Presenteeism will be an inevitable consequence of the proposed boost in the overtime exemption short test cut-off level from $24K to over $50K. In order to give more workers eligibility for federally required time and a half overtime (always a good political move during an election year), government must force employers to pay more people by the hour. Management will have to make more employees punch clocks or otherwise track their time on the job so their companies can comply with the new law. People who never had to punch a time clock will suddenly find their wages tied to hours. Time spent at work will become more vital than output quality, quantity or cost. That's a terrible outcome.

Spreading the message that mere presence is the only valuable service employees can provide contradicts all attempts to glorify the dignity of labor. How can work be so noble if the only thing that counts for compensation is how long you spend following management's directives? This will be a depreciating insult to modern knowledge workers whose labor is primarily intellectual rather than manual. When you are employed to perform responsible tasks with your brain, the amount of time you spend thinking is less important than the value of your mental output. When income depends on the quantity of hours spent on the job, that inspires workers to stretch out their efforts over longer periods rather than strive for higher quality or more efficiency. From a behavioral economic standpoint, pitting the interests of the employee against the interests of the employer like that is just plain stupid.

When the majority of people labored with their hands performing repetitive motions prescribed by management to tend, operate or serve machines, it might have made sense to pay according to time spent. Then, the industrial workers had very little control over their productivity: detailed procedures were prescribed all the way down to precise motions. Assembly line speeds were set by owners. Factory minions merely serviced the expensive machines that were more valuable capital assets than mere human resources. Agricultural workers bent their backs tending the fields, doing equally repetitive tasks. Foremen oversaw the laborers and provided literally detailed direct supervision, complete with whips, whistles, horns and buzzers. Low-level line workers added little value beyond their presence. Today, a tiny shrinking fraction of the current American workforce still experiences those limited industrial conditions which do justify worker timekeeping.

Despite that reality, exempt professionals and members of management who had therefore previously taken greater pride in their employment will now be told by regulators that:

· they are no longer professional nor managers;
· only the quantity of time spent at the work station holds value;
· the nature of their productivity output is meaningless;
· how long employees are present matters more than the results achieved.

Those depressing changes may generate some bigger incomes or create a few more jobs, but the costs from losses in work-life balance quality could be very high. Presenteeism, enshrined in the FLSA change proposal, is not something that will enhance morale or engage intrinsic motivations.

The time to do anything about it may have passed, but we should at least kick and scream in protest before we are dragged into a dark corner where motivational muggings may occur. Has no one else noticed this? Who has spoken up about the implications of this regulatory change?

E. James (Jim) Brennan is an independent compensation advisor with extensive total rewards experience, specializing in job evaluation, market pricing and pay budget distribution. After corporate HR jobs in chemical and pharmaceutical manufacturing, he consulted at retail, government, energy, IT, tax-exempt and other industries throughout North America before becoming Senior Associate of pay survey software publisher ERI until returning to consulting. A prolific writer (author of the Performance Management Workbook) and speaker, Jim gave expert witness testimony in many reasonable executive compensation cases both for and against the Internal Revenue Service and also serves on the Advisory Board of the Compensation and Benefits Review.

"Walking Dead" Image courtesy of holohololand at FreeDigitalPhotos.net

Comments

[Jay Schuster]

Well done piece, Jim. Fine thinking and writing.

[E. James (Jim) Brennan]

Just curious, Jay. With all the current attention about "work-life balance," it puzzles me that no one else has been commenting on the highly disruptive effect the expansion in FLSA coverage will have on plain old physical health.

A rule requiring you must BE THERE for measured periods of time in order to be paid is anachronistic. Presenteeism limits flexibility, inconveniences workers, disrupts families and forces physical proximity. Paying by the clock also demeans the value of employee productivity quantity, effort quality, skill application and competence leverage. Contagious illnesses will spread more easily, of course, but the negative psychological effects may be more serious.

Think about the unexpected reductions in the intrinsic rewards felt from freedom to choose work hours and to control personal work schedules. Employees will lose the advantages of their OT exemption in exchange for greater hourly earnings potential (which might never be realized). Money can be a handcuff, trumping health as a priority. In this case, government obsession with expanding overtime eligibility overcame public physical welfare and economic productivity interests.

That's my take, and I'm sticking to it ... at least, until someone comes up with a good rebuttal!

[Jay Schuster]

You are spot on, Jim. Those issues should be at the front of everyone's mind. Remember, the entire 'work-life' movement is based on 'copycat behavior'. A few employers developed a workforce strategy and a reward strategy to match that would help their business. An element of this was some of the 'benefits' that have become known as 'work-life' but the initial goal was business-driven and those employers knew why they were doing what they were doing and what to expect from this. However, everyone else merely copied what these companies did without a workforce strategy or reward strategy so they just copied in a brainless fashion.

The 'work-life' movement can't really look at the effectiveness of the programs and certainly not at things like FLSA because it has become an 'entitlement' and a 'career'. It only goes to show that you should 'measure twice and cut once' when you are sawing wood or adopting reward practices.

I was on a 'panel' talking about 'reward stuff' and someone with a conference badge saying, "VP of Work-Life" came up to me to say, "You are challenging the foundations of my job". To that I said, "How right you are".

This is very good, Jim. Perhaps you should do it as an article for something like CBR?

Hope the Easter bunny comes to your house Sunday.

[Rudy]

Yes, I have run into this phenomenon. I am an efficient, highly competent worker,and my supervisor says I am able to complete my assignments much faster with equal quality as my co-workers. Yet when I ask him why I can't go home early when this happens, he says you must put in 40 hours each week. We don't get paid for overtime. Apparently, he doesn't feel that the 40 hour workweek is an outmoded concept when it works in the employer's favor.

[E. James (Jim) Brennan]

Sorry about that, Rudy. Such clock-watching supervisory behavior probably stems from his anxiety about push-back from other subordinates or worry about criticisms from his boss. Explaining the fact that exempt workers are legally free to leave early without pay penalty won't help stiffen the spine of a weak supervisor.

In your case, notice how his insistence on presenteeism has affected your morale. It has not increased your eagerness to serve productively, has it? The improper priority given to nonessential external inputs over essential actual outcomes stimulates resentment and creates dissatisfaction: that does NOT work in the employer's favor.

Watch for a later article on "Superficials Over Essentials" on that exact topic. Thanks for the segue!

[Tony Bergmann-Porter]

In a dreadfully perverse sort of way, I (personally, speaking only for myself and emphatically not for my employer) eagerly look forward to explaining to formerly-exempt employees that all of these negative consequences - none of which they likely sought or asked for - are the exclusive result of government meddling in the workplace.

[E. James (Jim) Brennan]

They know what is best for us, Tony. At least, that's what they claim. Watch for the headlines chortling about the enhanced earnings potential of "the Middle Class" so generously enabled by the benevolent elected Upper Class ... or something like that.

Strangely, I don't expect to see any comment about the benefits incurred by "the Lower Class" because they are never identified or mentioned at all. Wonder why?

[Tony Bergmann-Porter]

Because there aren't any (benefits, that is) would be my first guess.

[E. James (Jim) Brennan]

Agree on two levels: (1) any such definition of citizens belonging to "the lower class" would be a lose-lose no-win proposition and (2) those designated individuals might not gain any advantages by the new rule.

[Margaret Dyekman]

I would like to offer another point of view. Consider yourself a retail store manager or a pest control manager - earning $45,000 per year. You are expected to work long weekdays plus every other Saturday (or Sunday), and during high season you put in 55-60 hours a week and other times 48-50 on site. You receive phone calls at home at night from employees who are calling in sick the next day. You have to check e-mail and return calls in the evening. You are under a bonus plan, but sometimes it materializes and sometime not, and even though you work hard and smart, other factors out of your control mean that you get a management bonus (let's say $5,000) every other year. These are real life situations I've seen, and at some point one has to wonder what is the right salary for someone to be treated "fairly" for all the time and effort being put in. Is $24,300 the right number? $50,400? Another number? No number at all? It's a complicated question, but there are two sides. And I don't see the second side presented in previous comments. IMHO white collar workers over the past years have been asked to do more and more for the same or only a little amount of more money and sometimes I'm surprised there hasn't been more of a revolt. But there are employers out there who are practicing better total rewards management and are those kinder-gentler employers who truly motivate on all levels. And probably don't have a big issue with this proposal. It's the burn-em and churn-em employers who may find that this change to the law may have the biggest effect on them. Employers in hospitality, retail, call centers - traditionally lower-paying industries, will be most affected. Good idea or bad? Guess it depends on your perspective, and without a doubt there are many perspectives and angles to the discussion.

[E. James (Jim) Brennan]

Excellent example, Margaret. You help us focus on the key point. Should an employer be permitted to compensate a worker by time alone, by time and effort, by output results, or by any combination of those elements? Who decides? Who determines if the scheme is fair, inadequate or illegal?

That "second side" you so nicely stated has been trumpeted by the DOL news releases already. Your points also apply to every executive and most professionals. All NEOs could identically complain about being unfairly compensated for their long hours and hard efforts. While their pay is usually criticized as excessive, it is established in the same manner. Free market economic dynamics are supposed to operate to establish a proper equilibrium point for each unique employee value proposition.

Your wider question anticipates a different article I recently finished for a future post about pay misallocations. Watch for it!

[Herb]

Glad you made those points, Margaret. There are two sides to this story, and some employees are being taken advantage of by their employers which we tend to overlook or downplay. Thanks.