The Federal government has changed a law that is relative to labour laws and overtime pay. For the most part the law isn't going to effect a lot of people. If you have employees that are in your organization who are paid a salary you need to pay attention, get your pen and paper out. 

This passed May 18th, 2016 with an implementation date of December 1st, 2016. No Political discussion, it is what it is there is nothing to it.




Before we dig in I want to talk about the mindset in which you approach things in life. Often times what happens is we think because of some stimulus there's going to be a bad outcome, for example there's a bad stimulus therefore I'm crabby. Keep in mind that the decision we make about this change gives us the ability to have the outcome we want. 

There's going to be some people who love this law and there's going to be some people who hate it, it all depends on your perspective. If you're someone who loves this because you're going to make more money because of this, my advice, ADD MORE VALUE! If you don't, I promise you somehow someway people are going to change things. If you just think you're going to make 20% more by doing the exact same thing, you're nuts. Make a better decision, ADD MORE VALUE.


As an employer if you're concerned about this impacting your overhead and driving it up, there's a whole lot of ways you can handle it. The best way is to be transparent with your team, sit-down with them and let them know there is a lot of ways to handle it. The reality becomes we approach this circumstance, this challenge and mindset with what's going to be the best for the overall organization.

If you are the boss, there are a lot of things to consider like morale issues you could greatly impact. If all of a sudden you start changing peoples hours because you don't want to pay this additional income, which is legally theres, and you're cutting their hours, legally, you're going to create massive morale issues for your team. You really want to put some thought into how you roll this out to everybody, if you're the boss be very transparent with people and let them know about your concerns. Run the math and see how this is going to impact you and after sitting down with your coach go and run through everything with your team. Ask the question, "How can we all come together as a team, rally together as team to perform at a higher level?"

Lets dive into this law and talk about the impacts it may have on your company.

  1. Goes into effect December 1st, 2016.
  2. If a worker makes less than $47,476, the employee is entitled overtime if they work more than 40 hours a week. That impacts 4.2 Million workers in the U.S. (https://www.dol.gov/whd/overtime/final2016/)

Employers have a few different ways to comply with the law:

  1. You can raise your employees salary above the threshold of $47,476
  2. Pay the time-and-a-half for those who are working more than 40hrs
  3. Cut people's hours to make sure their not working more than 40hrs

What they did was calculated where they believe the minimum poverty levels were, they came up with a multiple of it. The $47,476 is not just a random number that they came up with, it's a multiple of a poverty line in order to help people get over that threshold. So every 3 years they're going to revisit what the cost of living is, what the poverty line is and they are going to adjust the number. The number will likely go up 3 years from now in 2019.



A few other things you may want to know about the act:

  1. There is no limit on the act relative to ages of employees.
  2. It does not require overtime for those who are working Saturday, Sunday, Holidays or regular days of rest. It's only if these people are working overtime on those days.
  3. It does not need to coincide with the calendar week. Whenever your work week starts from a payroll perspective, for example, if it runs Tuesday through Monday it would be those dates.
  4. You can't average the hours of 2 weeks. So if you do a two week payroll, you can't say "Hey you worked 42 hours last week and 37 hours this week therefore you don't qualify." It is PER week!

I see both sides of this, employers and team members. I see where there is an opportunity for morale problems, I see where there is an opportunity for increase pay, I see where there is an opportunity for employers to say "that's just the man sticking it to me." Remember you have a stimulus, you have something that takes place and you have an outcome and in the middle is your opportunity to make decisions. Take this thing, this law, whether good or bad and find a way to make it into something positive.
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I realize I gave you options on ways to react to this new law, but there are so many more ways to react. If all of a sudden I put incentive in place for my team and say "If we can perform at this level, I will absolutely pay you, in fact I'll just give you the raise! If we can perform at a higher level! We've got two and a half months to prove it." — That's just one idea, there are so many different ideas we can utilize here.


Limitless ideas.


If you find yourself sitting there thinking you only have two choices, I encourage you to sit back and think about how you can create 3 options to solve this. Maybe 4, maybe 5 and if you can't do that go take a walk, take a deep breath do something that will help you clear your mind!

These are realities we need to deal with because if we don't they'll come back and bite us in the butt in the form of massive penalties. My encouragement for you, find a way to make something amazing out of this opportunity, there's always an opportunity there. Maybe impress your team by offering them more than a minimum raise, give them something additional, maybe impress your boss by saying "I know this is going to cost you extra but I think because of this I can do this, or this, or this, or this to help justify the extra cost for you." I think if you do that, everyone is going to win.

Celebrate these victories! We're excited to help you and your business, we're excited to see your business
succeed and thrive that's what we're here for. We want to help everyone accomplish and live our your dreams!

Darren and Obama
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