Read Start Your Own Business Online
Authors: Inc The Staff of Entrepreneur Media
Start Your Own Business (64 page)
e-FYIRecruiting firm Robert Half International offers several salary guides that contain data on average starting salaries in accounting, administration, information technology and legal and creative fields. You can request a complimentary copy at
rhii.com
.
Under the FLSA, all employees are classified as either exempt or nonexempt. A nonexempt employee is entitled to a minimum wage and overtime pay as well as other protections set forth in the FLSA.
Exempt employees are not protected under these rules. However, if you wish to classify an employee as exempt, you must pay him or her a salary. Anyone paid on an hourly basis is automatically considered nonexempt; however, there can be nonexempt employees who are paid a salary.
If salary is not the determining factor, what factors determine whether an employee is exempt? Under FLSA and most state laws, an exempt employee is one whose job responsibilities, more than 50 percent of the time, involve the regular exercise of discretionary powers and can be characterized as:
•
Executive:
usually a manager who directs the work of other employees and has the authority to make recommendations affecting the status of those employees (e.g., hiring, firing, promotions, etc.)
•
Administrative:
a person who performs office or nonmanual work under general supervision and which primarily involves special assignments or requires specialized training, experience or educationAHA!Want to get an idea what others in your industry are paying workers? The Bureau of Labor Statistics offers the National Compensation Survey for most regions of the country. The information is broken down by occupation, industry and demographics. The bureau also has information about benefits. To access the reports, visit
stats.bls.gov/ncs/#tables
or call the Bureau of Labor Statistics’ regional offices.
•
Professional:
a person who is engaged in a recognized profession such as medicine or law or in a field of learning that is specialized and predominantly intellectual or creative.
There are additional exempt categories for more specialized employees, such as professional artist, computer professional or outside salesperson. In addition, your business may be subject to both federal and often more restrictive state laws governing the exempt status of employees. In those instances, an employee must meet the requirements for exemption under both federal and state law.
Tip CreditsStates sometimes set minimum wage laws above or below the federal minimum wage standard. If your business is subject to both state and federal wage laws, you’ll have to pay the higher of the two.
Under federal law (the Small Business Job Protection Act of 1996), you may apply tips received by an employee against the employee’s minimum hourly wage, provided that: 1) the employee makes at least $30 per month in tips, 2) the employer pays at least 50 percent of the federal minimum wage, 3) the employee has been informed of the applicable law governing minimum wage and tip credits, and 4) the employee retains all the tips received by him or her (unless there’s tip pooling with other employees). However, if the hourly wage paid by the employer when added to the tip credit is less than the minimum wage, the employer must make up the difference.
Once again, you will need to make sure there are no contrary state laws governing if and when you can use tip credits to meet your minimum wage obligations. For example, California law requires a higher minimum wage than federal law and thus applies to California employers and employees. Because California law prohibits crediting tips against minimum wage payments, tip credits are unavailable in California. Tip credit is also not allowed in Alaska. For a table of state laws on tip credits, see
dol.gov
.
Overtime Requirementsdol.gov
.
Excluding certain industry-specific exceptions, federal and state law requires that nonexempt employees be paid overtime. Under the FLSA, nonexempt employees must be paid one and a half times their normal rate of pay for hours worked in excess of 40 hours during a workweek. A workweek is defined as seven consecutive 24-hour periods. Although a workweek can begin on any day, it must be fixed for that employee and cannot be changed so as to evade applicable overtime laws. Most states also have their own overtime laws, and if they are more favorable to employees, those are the ones you must follow. For example, under California law, employees who work more than eight hours during a single day are entitled to overtime, even if they do not work more than 40 hours during a given workweek (the federal requirement).
Remember, nonexempt employees can be salaried as well as hourly. So don’t make the mistake of assuming that just because an employee is salaried, he or she is exempt from overtime.
TIPFor a comprehensive look at how to start a successful safety program, read
Workplace Safety: A Guide for Small and Midsized Companies
(Wiley) by Dan Hopwood and Steve Thompson. Besides presenting helpful information about core OSHA regulatory requirements, the book covers workers’ comp, disaster and emergency planning, injury investigation and management, best practices and more.
Why worry about safety? Because failing to do so could literally destroy your business. Besides the human loss, workplace accidents cost money and time. You could be liable for substantial penalties that could wipe out your business’s cash flow. The Occupational Safety and Health Administration (OSHA) can assess huge fines for willful violations of safety rules, especially when they could result in death or serious physical harm. In 2005, BP Products North America Inc. had to pay $21 million in penalties for safety and health violations after a fatal explosion at its plant in Texas City, Texas, that killed 15 workers and injured more than 170. So paying attention to safety is definitely worth your while.
OSHA RegulationsAll employers, whether they have one employee or 1,000, are subject to federal OSHA requirements. However, in states where a federally certified plan has been adopted, the state plan governs. State standards must be at least as strict as the federal standards.
Businesses that use nonemployee workers, such as independent contractors or volunteers, are not subject to OSHA. Workers are considered employees under OSHA if you:
• Control the actions of the employee
• Have the power to control the employee’s actions
• Are able to fire the employee or modify employment conditions
Small employers (with ten or fewer employees) don’t have to report injuries and illnesses. However, that doesn’t mean they are exempt from OSHA regulations.
e-FYIThe Institute for a Drug-Free Workplace is a nonprofit association that provides information, education and advocacy for companies concerned about controlling illicit drug and alcohol use at work. Learn about drug-testing laws, read model employer guides and more at
drugfreeworkplace.org
.
The first step in complying with OSHA is to learn the published safety standards. The standards you must adhere to depend on the industry you’re in.
Every business has to comply with general industry standards, which cover things like safety exits, ventilation, hazardous materials, personal protective equipment like goggles and gloves, sanitation, first aid and fire safety.
Under OSHA, you also have a general duty to maintain a safe workplace, which covers all situations for which there are published standards. In other words, just because you complied with the standards that specifically apply to your industry doesn’t mean you’re off the hook. You also need to keep abreast of possible hazards from new technology or rare situations the government may have thought of and published standards for.
Sound exhausting? Help is available. Start with your insurance carrier. Ask if an insurance company safety specialist can visit your business and make recommendations. Insurers are typically more than happy to do this since the safer your business is, the fewer accident claims you’ll file. The government can also help you set up a safety program. Both OSHA and state safety organizations conduct safety consultation programs. Check to see what programs your state safety department offers, too. You’ll find local offices of government agencies as well as state organizations listed in the government pages of your phone book, usually under “Labor Department,” “Department of Commerce” or a similar name.
Don’t forget to tap into the resources of your chamber of commerce, industry trade association and other business groups. Many offer safety seminars and provide safety training literature free or for a nominal charge. In addition, there are private consultants who can help small businesses set up safety programs that meet OSHA regulatory standards. Your lawyer may be able to recommend a good one in your area.
Other books
Holy City by Guillermo Orsi
The Navigator of Rhada by Robert Cham Gilman
The Imposter Bride by Nancy Richler
Stray Love by Kyo Maclear
the Viking Funeral (2001) by Cannell, Stephen - Scully 02
The Shadow Throne by Jennifer A. Nielsen
Just Like Florence Nightingale by Sean Kennedy
Yayati: A Classic Tale of Lust by V S Khandekar
The Doctor's Daughter by Hilma Wolitzer
Darkness Before Dawn by Claire Contreras
