As companies begin to experience an up-tick in business they resign themselves to the probability of adding staff.

Immediate questions arise:

Is the increase in growth sustainable?

Do I need a person full time or part time?

Can I find a good person willing to work part time?

Can I engage an independent contractor?

Will they be exempt or non-exempt from overtime pay?

 

These are all critical questions but the last one plays havoc with employers who incorrectly classify their employees. When in doubt, the best course of action is to verify your classification by checking the Fair Labor Standards Act. 

 

The litmus test of correct classification is criteria that must be met. One of the criterions scrutinized is the “DUTIES TEST”. 

It is the measurable performance of the job duties that matters for classification. Which of these titles would carry an exemption?

 

 

It depends on the employee’s primary duty.

 

The Executive Exemption is based on the management of an enterprise or a recognized department or subdivision which involves regular direction of work of two or more other employees.

This person also has authority to hire or fire or their recommendation to hire, fire, promote other employees is given particular weight.

 

The Administrative Exemption (often misclassified) is based on performing office work directly related to the management or general business operation of the employer’s customers. This person also must be in a position to exercise discretion and independent judgment with respect to matters of significance.

 

The Learned Professional Exemption relates to performing work requiring advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction.

 

The Creative Professional Exemption relates to performing work requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.

 

The Computer Exemption involves one of the below:

A. Application of systems analysis techniques and procedures including consulting with users to determine hardware, software, or system functional applications: OR

B. Design, development documentation, analysis, creation, testing, or modification of computer systems or program including prototypes based on and related to user of system design specifications: OR

C. Design, documentation, testing, creation, or modification of computer programs related to machine operating systems: OR

D. A combination of duties described in (A), (B),and (C) providing the performance of which requires the same level of skills.

This most often applies to computer systems analysts, computer programmers, software engineers or other similarly skilled workers in the computer field.

 

The Outside Sales Exemption involves making sales or obtaining orders or contracts for services or for the use of facilities for which consideration will be paid by the client or customer. This person will customarily engage in service away from the employer’s place of business.

 

As business owners it’s not only about our getting our ducks in a row; they’d best be in the right row!

 

 

 

 

 

 

 Strategy #4   In the case of companies who had reduced hours, designated furlough time and implemented job sharing as a means of cutting costs, reversing the pattern is easy enough. Adding back hours and expanding components of jobs that had been shaved heighten morale and keeps trained staff on the job. Letting jobs return to their full scope gives companies opportunities to expand product and services quickly and efficiently. Converting temporary staff to permanent hires can allow the companies tax credits in some circumstances.

 

Basic math would indicate that we are overdue for a change and that a rebound is imminent.

No one will argue the need to anticipate better days ahead but are businesses ready?

 

If the rebound came half as slowly as the recession began for most, would your supply chain be prepared to meet demands?

 

Now is the time to evaluate your supply chain to ensure that it won’t snap apart when the long awaited, desperately needed rush of orders piles on your company. There is nothing more upsetting than a company which has weathered the storm only to find itself too far from shore to be an effective supplier. Companies that can ramp up to meet those demands quickly and accurately will experience the stronger and steadier growth for 2010. Not only will sales be stronger but credibility will increase which translates to a larger market share.

 

According to the Chicago Fed National Activity Index, inventories will be rebounding. Companies are regrouping to determine inventory forecasting. You can’t sell your customer what you don’t have; what’s worse is that your competitor will. Once that customer is forced to go elsewhere the next order from that customer may never come.

 

Companies that have put technology on the back burner will want to analyze and automate how they link departments and processes into the best solution for their customers. If your competitor can deliver the goods more effectively and at a lower cost because of technology, you run the risk of losing business and goodwill.

 

Flush inventories and hi-tech solutions will be meaningless without the personnel to support the growth models. Do you have a weak link?

 

If you find you are wanting on the last point of personnel, there are people available with better skills and experience than during any other recession in recent memory. These people are available for less money than used to be the case. When recessions last as long as this one has, excellent staff has hit the chopping block. 

 

In shorter recessions lasting only 8-10 months and when unemployment doesn’t hit double digits, many of the released personnel were let go for reasons other than an economic downturn. Employers use a recessionary economy as a catch all reason to “clean house” of less than stellar workers, or to offer buyouts to aging employees to make room for the next generation (which is waiting its turn but ready to bolt) or to cut the excess from over staffed department payrolls. 

As the economy moves forward, companies will more than likely restore hours first then begin to offer overtime to their employees and finally contract temp employees before hiring a full time person. This is a great time for employers to snap up the talent on the market.

 

“Take away my oil wells and factories. Simply leave me my 50 best people and I’ll have it all back double in 5 years. It’s not the business. It’s not the marketplace. It’s the people.”     Paul Getty

 

Do you have those people?