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Overtime rule changes coming

Discussion in 'Business Operations' started by snomaha, Mar 23, 2014.

  1. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,189

    Looks like the current administration is proposing changes 2015/2016 to who is exempt from overtime. The current threshold of $455(per week) could be raised to as high as $970 or $50,440 per year. They are also looking to narrow the definition of "management" spelled out under the FLSA.

    This could have a major impact on my business. Nothing like adding more rules and regulations to the entrepreneurs who are creating jobs that drive the economy.
  2. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 9,965

    I can understand this tho, there are ALOT of vultures in this industry that abuse the 'manager' /salary thing.

    usually when a new rule comes up, someone had to be abusing the situation BADLY in the first place.

    It's kinda like the 'no sex with animals' rule…. think about that.., someone had to be doing it enough and long enough to get someone else's attention, in order to write a law saying STOP DOING THAT!
  3. 205mx

    205mx LawnSite Silver Member
    Messages: 2,385

    So you're comparing sex with animals to manger pay

    Another reason I usually skip your posts.
    Posted via Mobile Device
  4. grass-scapes

    grass-scapes LawnSite Bronze Member
    Messages: 1,552

    While the analogy he used may be a bit...um....strange, he is correct that there must be some issues. I see it a lot. A company will make a guy a "crew leader" with a vague definition of management and pay them straight salary. Its not legal in most cases, yet because of the gray area, it is gotten away with way to often. I get new hires in for an interview and I hear how they are paid a flat rate per week. Or the ones who are paid from the time they get to the first job....or the ones who are paid only for the time they are out working (not drive time), or the ones who are paid per yard, or the ones who are paid cash and given a 1099 (maybe) at the end of the year. ALL ILLEGAL. Most fall under subcontractor/employee dispute, or employment law. The problem is, most of employees don't know, so the employer can get away with it. The employee only sees what he thinks are dollar signs and thats what talks in their world.

    You would be amazed at the number of "recruits" who turn down work offers because I won't pay them under the table (presumably so they can avoid child support, or continue to collect some state or federal benefit/subsidy)

    Thats why the Department of Labor requires posting in a conspicuous place. But I suppose if they don't follow the rules in the first place, why would they follow the posting rules. Nothing gets investigated until a complaint is made.
  5. whiffyspark

    whiffyspark LawnSite Fanatic
    Messages: 6,273

    I know some national automotive chains pay management straight salary. They work anywhere from 40-70 hours a week. 60-70 during busy season

    They work well over 40 hours a week and have to be willing to travel anywhere in region. All for the same pay. No matter what.
    Posted via Mobile Device
  6. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 9,965

    You'd be surprised how much THIS happens in many industries.

    Since work has gotten extremely tight in the last decade, many people flock to any mention of steady pay.

    But the usual associated benefits have dwindled.

    In 2000 an area supervisor for TG got 40k, 401k, a cell phone, a truck and 80/20 medical.

    Consider now, 14 years later, massive inflation and the industry average for the same position is, BYOC (bring your own cell phone) 40k, obama care and no truck.
    That seems to be a marked decrease in pay, and oddly enough associated with A LOT more actual work than it used to be, as 'middle management' evaporated in many companies.

    Other industries are very similar.

    If you are a Walmart, Target or McDonalds manager and the subordinates below you don't show up for their shifts, guess who has to cover?

    It's a completely abused area of the labor department exemptions to OT.
    And many companies have 'fabricated' these manager positions in an attempt to defraud the worker and the system.

    It's something they know they should not do, but it's not explicitly written anywhere with no clear law broken and no real punishment associated to the behavior, so they feel entitled to abuse it .
    (just like beastiality) did someone NEED a written law saying it was wrong?

    Apparently so.

    You only have your fellow 'entrepreneurs' to blame for this one.
    Now they have invited the government in through their hijinks, to make a sweeping change that will brighten the day of several thousand belabored individuals and screw the pooch because, effectively, middle management in Landscaping and other similar industries will, effectively disappear as I don't think anyone can really afford to pay OT for estimating, designing and listening to customers yak yak about their day.
  7. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 9,965

    Flat fee IS actually legal IF:
    on average over the pay cycle (week) it's proceeds MEET or EXCEED minimum wage INCLUDING OT.

    Example… Rookie McSnuffy works an 80 hour week.
    40 regular, 40 OT.
    minimum wage of $10 (Im using this figure because of the rumor its going to change to that)
    400 for regular time, $600 for OT is $1000.00 for the week gross, before taxes.

    Flat rate, he mows 10 lawns a day for 6 days that week or 60 lawns.
    $10 per lawn = $600.00
    you MUST (because of the hours he worked) pay him the minimum difference of $400 extra dollars, gross. To be legal.

    However, if he completed 100 lawns in 6 days, $10 per lawn and that's $1000 its completely ok.
    But, there are no magic dollar signs, because this is EXACTLY what he would get paid at the government mandated minimum.

    Factor in the current minimum wage, which in AK is $7.75
    and your first 40 is $310 and the second 40 is $465 then 100 lawns could be a $225 "windfall"

    but is it REALLY? I mean we are STILL comparing this to minimum wage!

    Lets say you got paid $12/hr to cut grass. your check would be $1200 for that kind of time that week.

    Factor in things like rain (which a flat rate employee takes all the hit for) and there really is no benefit to being paid flat rate for a grass cutter.

    It works out fine for higher rate jobs, like mechanics, masons, drywallers even.
    but not grass cutters, it's a total rip off for the employee.

    UNLESS you outfit him with the best equipment and a tightly wound up route.

    But by and large I find companies that feature the "flat rate" mowing system, have neither tight routes (they take on any and all yards) nor the highest level of equipment….. so the point is kind of moot.
  8. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,189

    Those damn entrepreneurs - always looking to get a return on their investment.

    I'm in a market that has effectively 0% unemployment. My employees get paid what they are worth, or they will go somewhere else. The proposed change won't help anyone employed by me, it will only add another layer of regulation that stifles opportunity/growth. If the intent was to raise wages, it will fail - I may add more employees to avoid OT on the salaried employees affected, which in turn will lead to lower wages.

    The problem with making a broad brush change is that it doesn't take into account the area you live. 40k in the Midwest vs the NE or California is a big difference.
  9. grass-scapes

    grass-scapes LawnSite Bronze Member
    Messages: 1,552

    Im guessing I didn't clarify my statement. I am aware of paying someone flat rate per unit and its ok as long as they make minimum wage for 40 and minimum plus half again for over 40 for the week. It was more my intent to show that they pay the guy 20 per lawn or something to that effect with no hours tracked.
  10. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Messages: 4,657

    The fixed salary is an outrageous abuse of many workers. But I am not a fan of the time an half bs after 40 which was only enacted to force businesses to hire more employees than they wanted by making it painful not too. People should be paid for each hour they work there's no need for a reward of extra pay after a certain threshold has been passed and in seasonal trades its especially wrong.

    Id prefer the french idea from a few years back to try to motivate people in that lazy country to work. Which wasn't time an half after 40 but instead tax free after 35 hours. I wish we had that.

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