It is challenging enough to appropriately classify positions as to their FLSA (Fair Labor Standards Act) status, so there is no reason that I can think of to make life even more difficult for ourselves by doing things like the following:
- Making exempt status a criteria for incentive plan eligibility.
- Providing a higher level of benefits (e.g., more vacation or PTO days) to exempt employees.
- Creating an artificial salary ceiling for nonexempt employees (e.g., reserving certain salary grades - such as Grades 10 and up, for exempt positions only).
Many of us already face pressure from employees and their managers who see the awarding of the "exempt" designation (despite our best educational efforts) as a status thing, an acknowledgement of professionalism, or - ironically - a way to get more money. But we make the problem worse when we turn exempt status into a hurdle that must be crossed in order to participate in the company bonus plan, get better benefits, or earn a competitive salary.
My message to you, dear HR and reward friends: think and delink! Make FLSA status solely about compliance with overtime laws. If you have reward programs where you simply must limit eligibility, please find a different, genuinely business-related criteria to use instead.
Creative Commons image "headache" by dtasheva
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