Minnesota Supreme Court Sets the Record Straight on Municipal Employer Liability
A recent court decision has changed how Minnesota courts analyze whether municipalities may be liable for their hiring decisions—emphasizing that...
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Everyone has heard about the new overtime law that was due to go into effect in early December. Although the new overtime rules have been halted temporarily, once they do go into effect the changes will more than double the salary threshold for eligible employees and will affect about 4.2 million workers in this country.
Here are a few topics that small business owners need to evaluate prior to implementing the new overtime law:
- Figure out if an employee is really exempt.
According to the previous rule, most employees are exempt from overtime pay if they earn a minimum guaranteed salary each week and work at certain jobs, and earn more than $23,660. That total minimum salary will increase to $47,476. Now is the time to determine if an employee is exempt or if they are eligible for the overtime pay. - Decide how to address exempt employees.
There are a few options to deal with the changes.
A) increase salaries to that $47,476 minimum
B) set parameters for overtime and monitor and enforce those rules
C) consider other exemptions under which the employee may fall that do not require a minimum salary. - Examine options in covering your costs.
More than doubling employee minimum salaries will quickly get costly. That’s especially true for smaller businesses. The new standards may force businesses to raise the price for their goods and services. It’s up to the management to decide if making those types of changes will impact the future of the business.
Employees are sure to benefit from these changes. Small businesses could be hurt. The employer’s bottom line needs to be evaluated to ensure that it will not suffer. The business owner needs to come up with a plan that will work for his or her company. If you are not sure what the next move needs to be, ask for help. An internal discussion may not produce the results needed, so consider getting the advice of legal counsel to make recommendations.
Kandi Chapman is President and Founder of MBI Worldwide, a global employment background screening company. She writes articles related to entrepreneurship, human resources, company culture and employment background screening.