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Know | Twelve, August 2015

6 Aug 2015,
Posted by DelegateSolutions

Labor Costs May Soar for Entrepreneurs. Entrepreneurs should be paying close attention to proposed federal changes to the "white collar" exemptions of the federal minimum wage and overtime law, otherwise known as the Fair Labor Standards Act (or FLSA). These changes, if enacted, could cost entrepreneurs big. To understand the proposals first requires understanding of the five FLSA exemptions. They are: executive (supervisory), learned/creative professional, administrative, outside sales and computer professional. Any employee who falls under one of search-1these exemptions is ineligible for overtime. To be exempt under one of the white collar exemptions, three requirements must be met, but are subject to certain exceptions. (1) Minimum salary: The current minimum salary is $455 per week, though a $970 per week minimum salary has been proposed. (2) The employee must be paid on a salary, not hourly, basis. (3) The employee's primary (or most important) duty must be exempt. Currently, this is qualitative.

Employers have until September 5, 2015, to submit their comments to the Department of Labor. Here are five talking points with suggestions entrepreneurs might consider submitting: (1) The proposed minimum salary has more than doubled from the current one in the law. Consideration should be given to asking the DOL to reduce the minimum number to the original and relatively more reasonable number. (2) The DOL has asked whether some bonuses should count toward the minimum salary. Bonuses are an important part of many employees’ total compensation. So, they should count toward the minimum salary. (3) The DOL has proposed automatic annual increases to the minimum salary, to prevent future erosion, but assumes a level of certainty that does not exist. We don't know what the future will bring. Consider proposing increases every several years or so. (4) Since the federal test for primary duty is currently more qualitative, the DOL has asked whether it should switch to a quantitative approach, such as is the case in California, where an employee can meet the primary duty test only if he or she spends more than 50 percent of his or her time on exempt duties. Spreading the California requirement to all states may mean that employers will need to reserve money for litigation, with a corresponding drop in employee compensation and benefits. Be careful not to raise this as a threat. If more money goes to litigation, the less there may be for the employees. (5) The current DOL regulation for executives (supervisor and above) recognizes that these individuals often do exempt and nonexempt work at the same time. The DOL has asked whether the concurrent duty regulation for exempt employees should be eliminated. If the concurrent duty test is abolished, there may be smaller stores, for example, with no exempt supervisors, so the concurrent duty exemption should remain.

Facebook Will Let Users Buy Products From Retailers' Pages. Facebook is testing a shopping experience that allows users to buy items directly from business' Facebook pages. The new shopping feature will allow retailers to turn their Facebook pages into mini storefronts outside of their main websites. On mobile, the shopping features will appear in a new "shopping" section on the page, while on desktop the shopping section will appear as a separate tab on the page in the same area where the Timeline, About, Photos and other tabs are currently located. In the shopping section, companies will show off products in a format that appears to be similar to the way photos are laid out. If you want to buy one of the products, the Facebook-logo-ICON-02retailers will be able to choose whether the actual transaction will take place within Facebook or whether you'll be redirected to the company's website. For those businesses that choose to keep the shopping experience inside Facebook, the checkout process will be very similar to the one already in place on Facebook ads that use the buy button. Facebook says it's too early to offer a timeline for when it will expand more broadly to include more retailers or be surfaced to more users. There are a range of different-sized retailers and e-commerce companies currently involved, though Facebook has not yet announced who is participating in the program.




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