As I discussed last week, many small business leaders choose
to pay everybody salary, regardless of the rules. I’m thinking they won’t be doing that any more, now that the Department of Labor has issued new overtime rules and will be cracking down on people who misclassify non-exempt employees as exempt. What they may be doing is freaking out about whether they should give employees a big salary raise or how much they should be paying per hour and how they’re going to keep track of everyone’s time, and whether they have to manage a bunch of different payrolls, and whether that’s going to get them all tangled up and create a disaster. I’m here to say, really, that doesn’t have to happen. All of these questions have been answered by someone in your industry at some level and you just need to figure out the answers or get expert help…hint, hint. And while I don’t know how you’re handling payroll right now, I can assure you that there are payroll and HRIS systems can track time and handle payroll and many probably integrate into the systems you already have. You needn’t fear tracking employee time under new DOL rules.
So what are you paying your employees? Do you know if it’s competitive rate or way high or way low? You probably know if its way low by your turnover rate. Regardless, now may be the right time to perform a compensation survey and gather some benchmarking data.
And with regards to the payroll question, there are many vendors of time-tracking and payroll software. Some are created for specific industries, some are very mobile friendly, some are inexpensive. Basically, you can find some options. You can filter these options by products that calculate overtime, that integrate with your current payroll system, that have mobile apps and so forth. You may find that, instead of getting a lot harder, incorporating these systems into your operations makes life a whole lot easier. Some of them let all the managers know when an employee logged in and whether they’re on task, for example. And many can be managed just using your phone.
That’s not to say the whole transition will be easy breezy. Employees who have budgeted around a salary and are used to getting a certain amount every two weeks or month are probably going to be uncomfortable with becoming hourly, clocking in and out and potentially getting varied paychecks. You, or whoever handles payroll, are going to have to learn how to work with a new system. Change is hard. But that’s part three of the process: once you’ve figured out how much to pay people and how you’re going to do it, it’s time to launch a change-management plan. How are you going to explain what’s coming to employees in the least disruptive, most assuring, but clear, way possible? How will you phase it in? What do you do first? That’s phase three, for the next blog.
And if you want help with any of this…call us!
We work with companies on a project basis or on retainer, providing a custom level of HR help designed for your business, with offices in Austin, San Antonio, Dallas and Houston. Contact me at Caroline@valentinehr.com or call (512) 420-8267.