Managing through the Wage and Hour Changes Gigi Guerrero-Ivanovic Marty Rogoff

The US Dept of Labor has authorized major changes in Federal Law, effective as soon as December 1, 2016. Many states are following suit. You’ll need to Know, Prepare and Do

What do you need to KNOW?

What to Know: The Minimum Wage In July the minimum wage went up in 11 cities, two states, one county (LA) and Washington, D.C. By January 2017, 29 states and Washington, D.C. will have minimum wages higher than the federal level.  New York City by the end of 2018: $15 San Francisco by the end of 2018: $15 Chicago in 2019: $13 Conclusion: Wherever you are, it’s coming

Before you panic…. Some retailers got out in front of this issue. A few years ago, The Container Store, Costco, Starbucks increased the starting wages in their companies. Today, they believe that paying more has brought in a different quality of employee, resulting in superior customer service and less turnover.

What to Know: Who’s “Exempt”? As of December 1, 2016, the minimum annual salary for an exempt employee, will increase from $23,660 to $47,476. Many employees, including some “managers,” will now have to be paid hourly wages

Overtime changes will impact 4.2M workers across the country.

What to Know : Employer Requirements New requirements must be updated and posted in each establishment Employers must post a Minimum Wage Information poster in their establishment Telecommuting and off-the clock duties must be revised

What do you need to PREPARE?

What to Prepare: A Compliance Checklist Revise your complete employee roster Identify employees that may be affected by reclassification Revise your OT, telecommuting and time worked off -the-clock practices. Review Job Descriptions Go through benefits eligibility for exempt employees transitioning to nonexempt status, and how it may affect them. Update all your labor posters and documents to reflect the new requirements.

What to Prepare: A Communications Strategy Plan to make the announcement a few weeks before the new rates take effect in your area Communicating one –on- one, or in smaller groups Allow employees to interact and to ask questions on how their work, responsibilities, and schedules may be affected Anticipate any questions that may arise, and follow up the meetings with a memo.

What do you need to DO?

What to Do: Raise Performance Standards Make sure that all employees have (and help to develop their own) measurable goals, either daily, weekly or monthly Design simple-to-understand reports on these metrics that employees can see every day, week or month 3. Hold employees accountable for variances

What to Do: Institute Performance Reviews Deliver frequent and objective reviews using the metrics that make a difference Communicate the importance of self-review and self-improvement 3. Reward the top 10%. Improve or remove the bottom 10%. Rinse, repeat

What to Do: Focus on Training and Development 1. Give managers the education and tools they need to drive performance 2. Identify future managers as soon as possible, and challenge them with responsibility 3. Insist on delegation and follow-up skills

What to Do: Review the Organization Structure Challenge top performers to take on more responsibility; combine roles Take risks on “Hi-Po’s”—high potential employees 3. Push as much authority down into the organization where customer interface happens

What to Do: Cross-train Employees should be able to perform different tasks within the company. This not only helps with future departures, but also gives lower level employees an opportunity to ascend.

Compensation: Only 22% of employees leave because of pay

Top 3 Reasons Employee Stay 1. Pride in the organization 2. Fair compensation and an opportunity to achieve—a career path 3. Compatible and motivating supervisor, which is the single biggest factor in employee success

What to Do: Review Compensation Packages 1. Design wage “bands”, rewarding those who have more financial responsibility and who outperform the others 2. Tie compensation increases only to success (goals achieved in performance review) and to COLA 3. “Reach” in competitive recruiting. Higher wages should get you better employees. You, indeed, get what you pay for

What to Do: Develop Incentive/Recognition Programs 1. Start small! You can always go up..but not down. The reward for the employee is the win—the recognition and self-esteem-- as much as the $ 2. Always have “qualifiers,” to ensure that payout is affordable. For example, “Assuming the company hits its goal…” 3. Build bonus plans that encourage the behavior you want: team goals for teamwork, customer comments...or overall profitable sales with the first two as qualifiers

KNOW. PREPARE. DO. …and Good Luck !

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