How should an employer inform an employee of a change in Fair Labor Standards Act (FLSA) status?

Author: Michael Cardman, XpertHR Legal Editor

Informing an employee who has been "downgraded" from exempt to nonexempt can be a delicate matter. The employer should deploy its most diplomatic representatives to break the news, taking care to stress that the change in status is in no way a reflection of how much the employer values the employee. The now-nonexempt employee also must be trained in any timekeeping procedures that will now be necessary.

Care is also called for when informing employees who are "upgraded" from nonexempt to exempt. Although exempt status can carry a certain amount of prestige, many employees would prefer the cash that comes from overtime pay. If the now-exempt employee will forfeit a significant amount of income as a result of his or her new employee classification, the employer may wish to consider a raise in salary or some other additional work benefits to cushion the blow.