What Is Your Plan For Changes In Overtime Salary Law And Potential Minimum Wage Increases?

Anyone else see this? US Department of Labor New Overtime Rules

What is your company doing to prep for it? Has anyone done some calculations yet to establish the new hourly for contracts or service-call rate?

Not only this, but as you can deduce, this is a start to prep SMB to be ready for the idea to increase the min wage to $15.


Robert,

I think the key portion of that is:

Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);

Do you see any other parts of that being directly applicable?

I do wonder how many security companies will hit this as an issue since I thought most companies pay their techs on an hourly basis and people who are on salaries are typically paid over $50,000. Am I missing something?

Hi John,

Four points:

1- Staff that are on a Salary but under the $50,000 mark, like office manager, Warehouse, HR, Inside sales/appointment setters. It is hard to go back to hourly since Salary is also a symbol of status that I believe it is a good idea to keep.

2- They cant work more than 40 hours a week without going into salary overtime. By working more than 40 hours a week, employees showed their commitment and dedication to the company and used it to gain opportunities for advancements.

3- I believe this is a precursor for the min wage raise coming up soon. If min wage goes up to $15, I would believe the hourly rate for an intro tech would be around $28-$30.

4- Standardization across all states without considerations to local cost of living. I belive this will maximize the impact of inflation as increase of min wage kicks in

Standardization across all states without considerations to local cost of living

I agree about this. There's a ~2x difference in cost of living between the wealthiest urban areas and the rest of the country, so that alone is going to have some bad effects.

By working more than 40 hours a week, employees showed their commitment and dedication to the company and used it to gain opportunities for advancements.

This I am not so sure of. If you mean they are learning things they do not know that they need to advance, than I agree. But if this is simply them doing work / labor, like stacking boxes or doing paperwork, that seems to be unfair to the employee.

Overall, I agree with you that it is going to be an issue. I am curious how many integrators are likely to be impacted by this. Members, please share your thoughts.

Does anyone doubt that any government mandated pay increases will be passed along in higher costs to consumers? I strongly suspect the net effect will be loss of purchasing power to anyone on fixed income (retirees on Social Security, those living on savings, etc.). Personal savings rates will drop further as the effective interest rates track even lower into the negative. People already making more than minimum wage are not likely to sit passively as their purchasing power declines relative to what was. As the costs are passed along the actual purchasing power of the new minimum wage will probably be about the same as the current minimum wage- but the tax rates will bracket creep up and surprise- everyone gets a tax hike without any discussion.

Good thing, according to our government, there is hardly any inflation now. I gotta wonder what grocery stores they use.

How many here have positions at your companies that are paying minimum wage, and are filled?

Speaking only for myself, I don't have any positions where I am paying minimum wage to anyone. I could never fill that position.

I don't have any positions where I am paying the "new Federal minimum" either.

I don't see a tremendous impact in our industry. Others, perhaps; not ours.

As a matter of policy, I have always paid exempt employees (and there are not many that are exempt) overtime for weekends and holiday anyway. It is a matter of being fair.

I agree that few, if any, in our industry are paying less than the new Federal minimum. That said, do you think that if entry level positions that require no skill set are given a sizable percentage increase in pay, that the people that fill positions that require they bring and maintain a high level of training to their jobs will passively sit back and watch their income advantage over untrained people shrink? I think not. I expect this to be inflationary. I think most of this is politicians buying votes.

I expect this to be inflationary. I think most of this is politicians buying votes.

Yes, the cost of buying a vote has been steadily increasing...

"I agree that few, if any, in our industry are paying less than the new Federal minimum."

I'm guessing you're from a major city like New York. In the Midwest, average college graduates can start at $30,000 to $40,000 (Average is $36,000). Salaries come down to cost of living. $47,000 is a decent salary in the Midwest. In the Midwest, you can buy a very sizable 3,500sqft - 4,500sqft beautiful home for $180,000 to $230,000.

You are correct (almost); we operate in the shadow of NYC. More to the point, you highlight the major distortion of a mandated Federal minimum wage. The cost of living varies greatly across the States. If the intent of the law is fairness in compensation it fails to address the disparities in what a dollar can buy depending on where it is spent. As you suggest, normally the competition for workers within a market area tends to act as a self governing mechanism on wages paid.