Bill Smith is preparing to have heart-to-heart talks with most of his employees at CompuCraft Inc. in Grand Rapids, but the problem is he doesn’t know what to say yet.

Like virtually every company in the metro area that has salaried personnel, Bill is waiting to know today whether he will be asking some employees who have never punched a time clock in their lives to keep track of their overtime on an hourly basis. 

The Washington Post reported that the Obama administration today is expected to announce new rules on how that overtime threshold is reached, which the Labor Department estimates may boost the paychecks of more than 4 million American workers.

“I don’t think this is going to be easy -- it’s not just quick conversations that we knock out around the table,” Bill says. “There’s a lot of emotional intelligence that will come into play here.  Some people may say: Hey, I went to college and I'm not going to do that (punch a time clock).”

He set up a flow of RSS news feeds that will alert him when the U.S. Department of Labor issues rules on changes to the Fair Labor Standards Act regarding exempt versus nonexempt positions -- a pretty easy thing for Bill to do since CompuCraft is an IT management company that built its reputation in West Michigan as “the” place to go for Apple products and applications. 

After the Labor Department issues the rules, companies reportedly will have until Dec. 1 to get them implemented -- which is better than the 60 days notice that most local companies expected.   For companies that are in the service sector like CompuCraft, that delay is going to make life easier.

“We are not an 8-to-5 company, it’s the nature of our business,” Bill says. “Probably two-thirds of our full-time employees are exempt. How will we compensate someone for answering an email on Saturday or taking a phone call from a client at night?”

In general, employees may be exempt from overtime if they are paid more than $23,660 annually on a salary basis with certain job duties in administrative, professional, computer worker or sales positions. The proposed changes may set the overtime exemption threshold at $47,476 annually for those job classifications.

Bill said the Labor Department hasn’t changed the tests for executive, administrative, professional, computer or outside sales duties yet, but it is considering a California-style rule that would alter how the tests are applied.

“So we are waiting for the final rulings,” he says. “We may have to adjust people’s job descriptions and pay or put them on hourly. We don’t know.

“But we do know that this totally shakes the roots of how you operate your business.”

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