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The U.S. Department of Labor wants to significantly increase the minimum salary threshold required to qualify for the Fair Labor Standard Act’s (FLSA’s) “white collar” exemption. The new proposal would require employers to pay overtime to workers making up to about $50,000 annually, even those who are classified as managers and, thus currently exempt from the overtime rules for hourly employees. That’s more than double today’s $23,600 threshold.
According Lawn & Landscape research, the average landscape company pays its salaried employees (account managers, supervisors, crew foremen/leaders and designers) less than $50,000 a year. Under the DOL’s proposal, all of these positions would become hourly jobs.
“Everybody is going to have to look at their workforce, how they’re being paid and how they’re being classified, and make decisions of whether they’re going to change how they do that to meet the requirements,” says Tom Delaney, director of government affairs for the National Association of Landscape Professionals.
While FLSA does not limit the number of hours of overtime that may be scheduled, it does require employers pay covered employees not less than one and one half times their regular rate of pay for all hours worked in excess of 40 in a workweek – unless the employees are otherwise exempt.
One of the most significant exemptions affects so-called “white-collar” workers: They don’t have to be paid overtime if they meet all three of these tests:
- They’re paid a fixed salary, as opposed to an hourly wage.
- Their salary is more than a certain threshold amount.
- They primarily perform duties of a “bona fide executive, administrative or professional” nature.
Some states calculate overtime differently. California and some other states, for example, have a daily overtime standard, where employees are eligible for overtime once they have worked eight hours in a day, even if they don't work more than 40 hours in a week. Several states seem poised to follow the lead of California which adopted rules similar to the current proposal over a decade ago and where even the act of reading an email is “work” eligible for overtime pay.
Many industries hire seasonal employees for a variety of different reasons – amusement parks may need more staffers during the summer months, and department stores may need more cashiers during the Christmas shopping season. Unfortunately for a landscape contractor, there is no definitive answer to whether or not seasonal employees are entitled to overtime.
Of course, FLSA applies only to businesses with employees who engage in interstate commerce, produce goods for interstate commerce, or handle, sell, or work on goods or materials that have been moved in or produced for interstate commerce. For most businesses, a test of not less than $500,000 in annual dollar volume of business also applies (i.e., FLSA does not cover operations with less than this amount of business).
On a state level, however, some industries are "overtime exempt" when it comes to seasonal employees. Exempt businesses generally have to be an amusement/recreation business that is able to demonstrate they only operate during a few months of the year, or that a significant amount of their cash flow comes in only during a few select months of the year.
Although the finalized rule won't fully take effect until 2016, and could still potentially be undone by legislative wrangling, consulting a local employment attorney to determine what state laws apply, whether there is an overtime exemption in your area and if your snow removal business qualifies, is recommended.
The author is a financial writer based in Ardmore, Pa.
With each year of experience, the entrepreneur sees things differently and generally more clearly. Things we used to not recognize, we now not only recognize, we also understand them and the impact they have on our lives and our businesses. For example, I always looked at training and education as an expense. Now, I realize and know it’s an investment that pays big dividends. I was the person who tried to do way too much myself, thinking no one could sell as well as I could and no one could talk with clients as well as I do and no one could buy trucks as well as I could.
I now not only realize that was wrong, I also understand delegating is my KEY to success.
Another area my perspective has changed is vacations. I take them now. I enjoy them. I need them, and they’re a critical part of my past, present and future success. In fact, I’ll tell you I can’t afford to not take a vacation and I want to explain why you can’t either.
When my wife, Lisa, and I talked about getting married, one of the items we discussed was vacation. She said, “My family takes spring break vacations and I know as a landscaper, that’s your busiest time of the year, so I want you to figure out a way to take a spring break vacation each year.” I loved Lisa so much I was willing to do that.
I remember the first time I did this after we were married. I had so much anxiety it was ridiculous. All I knew to do was prepare as best I could and leave my people with notebooks to write down what caused them problems when I was gone. What were they not equipped to handle? I told them in case of emergencies, call me on my cell phone. That first trip, my phone rang so much, it really wasn’t the relaxing vacation it could have or should have been. When I got back, I was greeted with all sorts of notes and issues that only happened because of my poor planning, lack of training, poor communication and resistance to let go and delegate.
However, a lot of good things were done because I wasn’t there. People just did what they thought was best and didn’t do too badly. The next year, we went through the same process. My phone rang less, and I had only a few notes to review. Fast forward to today and I can tell you I go away and my cell phone hardly ever rings and I rarely come back to problems, voicemails or a mountain of work that takes a week to dig out. And there’s something far greater I come back with – energy and excitement!
Poet Ogden Nash said, “If you don’t want to work, you have to work to earn enough money so that you don’t have to work.” Simple, but true. Our businesses are the conduits that take us along in life. Our families and the other lives we impact are what we’re after.
Running a business should be fun. Vacations show you that if you work hard, you can play hard. If you aren’t taking a vacation, you aren’t going to realize your company’s utmost potential. You need to have periods where your team is there to operate without you. They learn more that way and you do too.
You can’t do this alone. For you to be able to think about tomorrow, you have to have people who can handle today. And to develop the people to handle today, you have to extricate yourself from the business in some key areas. It’s a process and taking a vacation is one of the best ways to figure this out.
So, you can’t afford to not take a vacation. Plan one, maybe it’s simple, maybe it’s a staycation, maybe it’s several long weekends to visit family and friends – just take one. Plan well ahead of time and work right up until you leave (those who take vacations know we are most productive the day before a vacation). Get your team together and tell them when you get back, you want to know what went well and what did not.
The answers to those questions will clearly show you what you need to work on to have a company that runs without you. And when you have a company that can run without you, you have a very valuable asset that someone else would want to pay top dollar to buy.
Marty Grunder is a speaker, consultant and author; he owns Grunder Landscaping Co. See www.martygrunder.com; mail