Traditionally, overtime pay has been mostly limited to hourly wage earners who are able to claim an extra per-hour fee for any time worked over 40 hours in a week. Currently, regulations have limitations on employees who can earn overtime pay, making it exclusive to those making low wages.
A Livable Wage
The Obama administration may change all of that. Legislators are currently reviewing restrictions on overtime pay with the purpose of possibly updating them. Under current federal laws, if a worker is considered an administrator or makes more than $455 a week, that employee can be denied overtime pay. When calculated over a year, a full-time employee would $24,000 regardless of hours worked.
The change could have an impact on financially-strapped small businesses, which are already facing a potential hike in the national minimum wage. Opponents point out that these changes could prompt businesses to reduce staff in order to be able to operate more affordably. They say this will, in essence, put more people on unemployment, further delaying the country’s economic recovery.
A Reduced Workweek
For many small businesses, however, reducing administrative staff is not an option. Business owners often put in long hours, working around the clock to ensure operations run smoothly. A trusted manager can offer the day-to-day help an entrepreneur needs while he works on meeting with clients and acquiring new business.
Paying 1.5 hours for every hour a manager works over 40 each week could leave small business owners to either pay more each week or take over for a manager several hours each week. If trusted staff has been putting in ten hours a week or more, that could leave business owners with some tough decisions to make.
The Outsourcing Option
To ease the burden and save money, many small businesses are investigating the benefits of outsourcing individual tasks. Everything from data entry to website development can be handled by an offsite worker with no long-term commitment from the business itself. This can ease a team’s workload, allowing on-site workers to focus on simply keeping operations running during the workday.
Unfortunately, these changes could adversely impact those small business workers who willingly put in long hours. Some workers who would have stayed after hours to learn a new area of the business or further hone their skills would now be sent home at the 40-hour cutoff. When new workers are brought in or tasks are sent offsite, these employees may find that they’re losing valuable opportunities.
Training Team Members
Another option for beleaguered small business owners is to begin bringing other employees in on leadership tasks. While managers and owners have certain responsibilities each day, there are some duties that a trusted part-timer or longtime full-timer could take on. The duty of opening and closing a store each day could be handed over to an employee you trust, cutting back on management hours without leaving important tasks unmanned.
SMBs may consider beefing up its apprenticeship-level workers, which will allow them to recruit and train inexperienced employees who show promise to affordably maintain current production levels. These trainees can learn the ropes while also handling business process tasks like manning storefronts, sorting mail, and restocking office supplies.
If these changes go through, they will have a greater financial impact on smaller businesses, since they often have budgets that can less easily absorb the extra cost. But businesses can make a few small changes that will help shift some of the workload to lesser-paid or outsourced workers, leaving managers to complete their assigned duties within a 40-hour workweek. This will enable them to focus on high-level tasks, improving their job satisfaction without leaving business owners with the excess work.
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