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There will be some adjustment for firms used to getting free labor from their managers. But since the new standard is the moral equivalent of what it was in 1975, it's not unprecedented. And since their competitors have to follow the same rule, nobody is at a disadvantage. Some prices will have to be raised.
For true mom-and-pop businesses, it's not going to be easy to absorb the additional cost. We have a small-town pizza restaurant. If we increased the manager's salary to the $42,xxx threshold, it would erase all profits. There would be no reason to keep the store open.
I've been crunching the numbers, trying to figure out how to handle it. Logic would dictate cutting back his hours and hiring another manager for two days a week. But who do we find to manage a small-town pizza shop two days a week, part-time? We could go with two full-time managers on staggered schedules. But then the (increased) payroll budget is wholly consumed by two people, and there is nothing left to pay for the additional staff (bodies) needed on nights and weekends.
Then your business isn't really viable to begin with.
another manager for two days a week.-this leads me to think that you are working somebody 7 days a week.
If we increased the manager's salary to the $42,xxx threshold, it would erase all profits.- this leads me to think that you are only making $10k or so in profit annually.
As you have presented it, you have a small business where you aren't working any hours yourself, otherwise you wouldn't hire a manager to work 7 days a week. You make less than $10k annually from this business.
Your business isn't going to last much longer in any case. Any increase in utilities, rent, or a major appliance replacement is going to put you in the red. A minor slip and fall lawsuit could do the same. Any business interuption of a few days, which could happen because of weather, a roof leak, or a road closure will similarly have you liquidating.
You have some structural problems in your business. that is the cause of your distress, not the FMLA adjustments.
The obvious solution is to just pay them the minimum, $47,476, it's still going to be less than paying overtime, and is still cheap at only $24/hour considering the responsibility of supervising or managing difficult, minimum wage workers.
Agreed!
I was making 47k even a year as a Food Service Director.
My guess is that they'd just bump that up a bit so they can continue to work the FSD like an exempt slave of the corporation to absorb the labor budget while they pay the hourly employees meager wages they can't live off of.
For true mom-and-pop businesses, it's not going to be easy to absorb the additional cost. We have a small-town pizza restaurant. If we increased the manager's salary to the $42,xxx threshold, it would erase all profits. There would be no reason to keep the store open.
I've been crunching the numbers, trying to figure out how to handle it. Logic would dictate cutting back his hours and hiring another manager for two days a week. But who do we find to manage a small-town pizza shop two days a week, part-time? We could go with two full-time managers on staggered schedules. But then the (increased) payroll budget is wholly consumed by two people, and there is nothing left to pay for the additional staff (bodies) needed on nights and weekends.
Agreed Jakabedy.
I wouldn't be surprised if once again the "unintended consequences" of this type of labor law is further burden on entrepreneur small businesses. More closing for business signs. I wonder how the little community I live in will be able to adjust to this.
Of course the large corporations and franchises can adjust more readily.
On the surface it all looks really good for the American public doesn't it?
Unpaid overtime is a scam. We don't pay you overtime. You are a professional. You're not a professional you are a sap. What if everyone works the overtime? Can they promote everyone? Once again you are a sap.
Then your boss comes to you with two hours work at 4:45 PM. so you work to 7:PM. Has anyone noticed that these people that take the bait also come in at 10 AM?
Forty seven thousand a year. Make it $75,000. That's when you're talking fairness.
I wouldn't be surprised if once again the "unintended consequences" of this type of labor law is further burden on entrepreneur small businesses. More closing for business signs. I wonder how the little community I live in will be able to adjust to this.
Of course the large corporations and franchises can adjust more readily.
On the surface it all looks really good for the American public doesn't it?
That being said Obama is pushing this and other rules out now for a very good reason; after the sixty day comment period Congress can vote to override any rule by a simple majority not subject to filibuster. If that happens and the POTUS signs off then the thing is gone. This has happened several times in past where an incoming newly elected POTUS essential voided rules created under the previous administration.
Sixty days takes us into June or July and given the current state of Congress Obama is betting it will not be possible to get a majority to vote against any of these last minute rule changes. Thus he can wait out the clock and whomever wins in November will not be able to sign off on any attempts to cancel said rules in 2017.
Furthermore this entire thing isn't over yet. The new rule regarding overtime contains a clause that mandates increases every three years. No such provision exists in the FLSA and thus the DOL in theory does not have the statutory authority it would seem to make such periodic reviews and increases. This could give affected employers something to bring to the courts. However since the rule is not in place nor have any such increased happened they cannot atm. Congress and or the next administration will have to sort that one out.
Then your business isn't really viable to begin with.
another manager for two days a week.-this leads me to think that you are working somebody 7 days a week.
If we increased the manager's salary to the $42,xxx threshold, it would erase all profits.- this leads me to think that you are only making $10k or so in profit annually.
As you have presented it, you have a small business where you aren't working any hours yourself, otherwise you wouldn't hire a manager to work 7 days a week. You make less than $10k annually from this business.
Your business isn't going to last much longer in any case. Any increase in utilities, rent, or a major appliance replacement is going to put you in the red. A minor slip and fall lawsuit could do the same. Any business interuption of a few days, which could happen because of weather, a roof leak, or a road closure will similarly have you liquidating.
You have some structural problems in your business. that is the cause of your distress, not the FMLA adjustments.
Here's the thing. There's conjecture, and then there's what's really happening. I'll fill you in on what's really happening. This was a business purchased for my husband's son to run and eventually take over -- providing him his inheritance while we're living. We would continue to own it, with my husband doing all the back-office functions for no salary until we paid ourself back for our initial investment. Then it would be turned over to the son. We anticipated this would take 2-3 years. It's a small business. Very small. When operating at the target volume, it can provide a working owner-operator a decent living in a small southern town. Probably about $30-40K a year. Unfortunately, the son crashed and burned personally and almost took the business down with him.
We live 1,300 miles away.
We were fortunate that the one other full-time employee had management experience. Son got removed from everything, new manager got a raise and got put on salary, and got the keys to the store. We closed Mondays so he would have at least some time off. He's doing a great job. We're building the business back up little by little. When we have a good month, we give him a bonus.
Nobody is paid under the table. There is liability and workers comp insurance. We're doing this the right way. Doing things the right way has a cost. But the business isn't leveraged in any way. Rent is very low because of a landlord who wants there to be small businesses in this small town. We're in the process of building up the business cash reserves again, after using our personal cash to keep it afloat while son was running it into the ground. As sales goals are met, we plan to give the manager raises and/or bonuses.
If the FLSA rule makes it through the gauntlet, we'll convert the manager to hourly and pay him overtime for hours beyond 40. It will still be miles below the 4x,xxx threshold, but will be in compliance.
So, what I hope you can see from this is that all business owners aren't some sort of greedy, faceless components of the capitalist Borg. We could have written off our investment, auctioned the equipment and walked away. But we decided to keep it open. That means one f/t position and 2-3 p/t positions in a poor, rural area. It means pizza for folks in the same area. It's what true small business is. A lot of work, a lot of struggle, and a little reward. Nothing more than that.
Here's the thing. There's conjecture, and then there's what's really happening. I'll fill you in on what's really happening. This was a business purchased for my husband's son to run and eventually take over -- providing him his inheritance while we're living. We would continue to own it, with my husband doing all the back-office functions for no salary until we paid ourself back for our initial investment. Then it would be turned over to the son. We anticipated this would take 2-3 years. It's a small business. Very small. When operating at the target volume, it can provide a working owner-operator a decent living in a small southern town. Probably about $30-40K a year. Unfortunately, the son crashed and burned personally and almost took the business down with him.
We live 1,300 miles away.
We were fortunate that the one other full-time employee had management experience. Son got removed from everything, new manager got a raise and got put on salary, and got the keys to the store. We closed Mondays so he would have at least some time off. He's doing a great job. We're building the business back up little by little. When we have a good month, we give him a bonus.
Nobody is paid under the table. There is liability and workers comp insurance. We're doing this the right way. Doing things the right way has a cost. But the business isn't leveraged in any way. Rent is very low because of a landlord who wants there to be small businesses in this small town. We're in the process of building up the business cash reserves again, after using our personal cash to keep it afloat while son was running it into the ground. As sales goals are met, we plan to give the manager raises and/or bonuses.
If the FLSA rule makes it through the gauntlet, we'll convert the manager to hourly and pay him overtime for hours beyond 40. It will still be miles below the 4x,xxx threshold, but will be in compliance.
So, what I hope you can see from this is that all business owners aren't some sort of greedy, faceless components of the capitalist Borg. We could have written off our investment, auctioned the equipment and walked away. But we decided to keep it open. That means one f/t position and 2-3 p/t positions in a poor, rural area. It means pizza for folks in the same area. It's what true small business is. A lot of work, a lot of struggle, and a little reward. Nothing more than that.
There really is not much rationale for your involvement in this business. Only pizza place in a small town. Should be a stable, solid business for someone, but there is no need for an outside owner from 1300 miles away to be involved. Especially when by your own estimate there is only enough for an owner/operator to make 30-40k a year off the place. With you having to hire a manager out of the 30-40k mentioned, there must be next to nothing left for you.
Business was only bought to help the son, did not work out. I would consider working something out with the manager and selling to him.
That being said Obama is pushing this and other rules out now for a very good reason; after the sixty day comment period Congress can vote to override any rule by a simple majority not subject to filibuster. If that happens and the POTUS signs off then the thing is gone. This has happened several times in past where an incoming newly elected POTUS essential voided rules created under the previous administration.
Sixty days takes us into June or July and given the current state of Congress Obama is betting it will not be possible to get a majority to vote against any of these last minute rule changes. Thus he can wait out the clock and whomever wins in November will not be able to sign off on any attempts to cancel said rules in 2017.
Furthermore this entire thing isn't over yet. The new rule regarding overtime contains a clause that mandates increases every three years. No such provision exists in the FLSA and thus the DOL in theory does not have the statutory authority it would seem to make such periodic reviews and increases. This could give affected employers something to bring to the courts. However since the rule is not in place nor have any such increased happened they cannot atm. Congress and or the next administration will have to sort that one out.
Should clarify that the DOL does not have a clear mandate to automatically adjust OT pay every three years. Depending upon how this new rule words that part of things is where it could run into trouble.
OTOH in three years the DOL could revisit the issue and go through the rule making process again to increase OT wages. That is rather a long way round of doing things especially every three years. It also is very uncertain as administrations change potentially every four and certainly eight years. Future heads of the DOL are not bound by this action unless or until it is proven the "automatic" bit is within Obama's administration to make stick legally.
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