Complying with wage and hour law and doing payroll are vital components of the process of paying your employees. First, however, you must decide what amount to pay them. What other employers in comparable businesses are paying is a good way to determine what an employee's salary or salary range should be.
Paying members of your small-business workforce as salaried employees may be easy for you and empowering for them, but in doing so, you must comply with the rules and regulations of the labor laws. The Fair Labor Standards Act guidelines do not apply to salary basis employees who are exempt. If your business classifies any of its employees as salaried nonexempt, the FLSA covers them as it would any other nonexempt employees.
Employment costs fall into several broad categories:
Finding technically qualified people who can function effectively in a rapidly growing startup venture is not easy task. In an earlier column we discussed the economic alternatives for head hunting. For this column it suffices for me to remind you to be sure to devote the time to make sure that your hires are as close to perfect “10s” as possible. Anything less will be a drag on your business.
Docking the pay of exempt employees is only permissible in certain circumstances. The Fair Labor Standards Act (FLSA) governs wage and hour laws of nonexempt employees. The law requires employers to pay nonexempt employees at least the federal minimum wage and requires the payment of overtime for an employee who works more than 40 hours in a week. Employees who are exempt from the law are not entitled to overtime or the federal minimum wage, but employers may not make improper pay deductions from their salary.
Wages have grown over the past few years at rates similar to historical trends. The frequently repeated claim that wages are “stagnant” is at odds with six measures of wages and compensation, which indicate that hourly and weekly real wages (wages adjusted for price inflation) have grown between 1 percent and 2 percent per year since the beginning of 2013. Rather than engaging in fruitless attempts to raise wages directly, policymakers can benefit workers by removing laws and regulations that have artificially increased the prices of consumer goods.
Economic growth starts with the individual, not the state
MLive columnist Rick Haglund is skeptical about the state’s choices of favored industries, noting that much of the Michigan Business Development Program subsidies go to manufacturers. “[D]eluded by the recent resurgence of manufacturing jobs, state policymakers are doubling down on promoting Michigan as a state that makes things,” he writes.
However, everyone should be skeptical of the idea that the state can lead economic growth at all.
On Jan. 29, the White House announced that the Equal Employment Opportunity Commission (EEOC) will issue proposed regulations to modify the Employer Information Report, known as the EEO-1, to include collecting pay data from employers with more than 100 employees. The EEOC says it needs this pay data to “assist . . . in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces.”
Setting salaries for your staff is always a tricky thing to do. It's especially hard if you've never done it before, because you probably don't even know where to start. On the one hand, you want to pay enough to get the best possible talent. On the other hand, you don't want to overpay.
Here's a quick summary to help you set salaries for all your staff:
Whether we’re making it, spending it, saving it or in lack of it, we think about money a lot. As a result, money spurs why we work and often the professions we choose. Still, money isn’t the be-all and end-all of a profession, nor is it the exclusive factor that determines your satisfaction with the work you do. That’s what makes these 20 professions special. They’re the highest-paying occupations from our Best Jobs list, and each have average and median salaries that crest $80,000. But they’re also jobs expected to hire abundantly this decade.
As George Eastman built the photographic film manufacturer Eastman Kodak into an industrial giant in the early 20th century, he thought long and hard about how to get the most out of his front-line laborers. He wound up designing a program to ensure that as corporate profits grew, so would people’s pay.
“You can talk about cooperation and good feeling and friendliness from morn to midnight,” Eastman said, “but the thing the worker appreciates is the same thing the man at the helm appreciates –dollars and cents.”