“Our Age of Anxiety is, in great part, the result of trying to do today's jobs with yesterday's tools.” ~Marshall McLuhan~
When new technology comes out, you have to make a very careful assessment of whether it is appropriate for your business or not. Additionally, you must ask yourself if this is a passing fad or will it change the way we use technology. Here is one of those new technologies that, I believe will change the way you are currently using this type of technology.
Quick Reference codes are a new trend in software technology that will have wide applications in business. Most commonly referred to as “QR codes,” they were developed in Japan more than 10 years ago and are widely used there, but are just now catching on here. While a normal one-dimensional barcode can only contain 20 characters, a QR code can handle thousands. Their value is that they can quickly and easily transmit information through a smart phone.
Though QR codes are just beginning to see widespread use, now is the time to start considering how you can implement this technology so you can be ahead of the curve rather than behind. So far, the most common use is directing a customer to your website, but QR codes can also be used to promote discounts and new products, and even as business cards. If you go to http://www.qrstuff.com/qr_code_examples.html you can see what QR codes look like and read about the many ways the technology can be applied, including temporary tattoos.
Creating a QR code is quick and painless and there is no learning time required. Even I was able to do it! Using sites such as ScanLife and Kaywa, all you have to do is enter your website information, and your QR code is generated in seconds. You can then copy and store the code for future use.
To read the QR code, you need a scanner app. iPhone, BlackBerry and Android all offer a number of options. The i-nigma and RedLaser apps for iPhone are both free and allow you to take a picture of the code with your phone. The photo is converted into the appropriate action (visit a website, for example).
Likify is a neat service that uses QR codes to help generate “Likes” for your Facebook page. Users who scan your Likify QR code are directed to a page where they can tap the “Like” button. Find more information at www.likify.net. QR codes are great, and they will be even greater with time. However, it will take a while before adoption is complete, so when considering using QR codes, you will want to make sure you have the right audience. Customers who are into sophisticated technology will be the ones most likely to accept and utilize QR codes right now. You may also find that a certain amount of education will be necessary to teach customers how to use them.
Now go out and find out if QR codes can benefit your business.
You can do this.
Sunday, June 26, 2011
Sunday, June 19, 2011
Criteria-the Heart of Decision-Making
“Nothing is more difficult, and therefore more precious, than to be able to decide.” ~Napoleon Bonaparte
There is no question that the ability to make good decisions is at the heart of a successful business. For entrepreneurs, especially those with small businesses, the cost of making mistakes is extremely high.
In one case, a firm selected the wrong vendor to supply a critical part and nearly went out of business when the supplier could not deliver. A second firm paid a high price when their software vendor delivered the software over a year late.
In a third example, a firm’s board of directors was considering what benefits to provide the CEO. The board made a tragic error by selecting the wrong provider and watched the CEO’s morale nosedive as his benefits shrank.
In each of these cases and many more, the entrepreneurs did not take the time to develop criteria to guide their decisions.
When making decisions, it is easy to go with a gut feeling. However, gut feelings do not require analytical ability or consideration of any objective criteria. As such, they can quickly lead you astray.
A firm was considering hiring a bookkeeper, which is such a critical function for every business. As they sorted through the resumes that had been submitted, they also looked at the applicant’s picture. This is not bad if one of your criteria is that the candidate be good-looking. However, if it is not one of your job requirements, including that as part of the initial screening could end up leading you down the path toward a wrong decision at a very high cost.
In order to make great decisions, you must determine the criteria ahead of time and apply these requirements to your decision-making process. For example, if you are going to hire a bookkeeper, your criteria might be that applicants have five years of experience, availability to work overtime, and knowledge of your specific bookkeeping software.
However, just identifying your criteria is not enough. You must also weight them according to their importance. For example, experience could be weighted at 60 percent, availability to work overtime could be 10 percent and knowledge of the bookkeeping software could be 30 percent. Weighting the criteria can be really helpful when ranking the candidates or alternatives.
An entrepreneur was evaluating possible locations for his new restaurant. His initial criteria were the traffic count, parking area and neighborhood demographics. On the initial pass, prior to applying weights, the entrepreneur selected one location based on these criteria. Once the entrepreneur applied weights to the criteria, however, the first location was tossed in favor of a second location that better met the owner’s requirements.
I guarantee that if you take this approach, you will make much better decisions. Now go out and fine tune your decision-making process by identifying criteria and weighting them according to importance.
You can do this!
There is no question that the ability to make good decisions is at the heart of a successful business. For entrepreneurs, especially those with small businesses, the cost of making mistakes is extremely high.
In one case, a firm selected the wrong vendor to supply a critical part and nearly went out of business when the supplier could not deliver. A second firm paid a high price when their software vendor delivered the software over a year late.
In a third example, a firm’s board of directors was considering what benefits to provide the CEO. The board made a tragic error by selecting the wrong provider and watched the CEO’s morale nosedive as his benefits shrank.
In each of these cases and many more, the entrepreneurs did not take the time to develop criteria to guide their decisions.
When making decisions, it is easy to go with a gut feeling. However, gut feelings do not require analytical ability or consideration of any objective criteria. As such, they can quickly lead you astray.
A firm was considering hiring a bookkeeper, which is such a critical function for every business. As they sorted through the resumes that had been submitted, they also looked at the applicant’s picture. This is not bad if one of your criteria is that the candidate be good-looking. However, if it is not one of your job requirements, including that as part of the initial screening could end up leading you down the path toward a wrong decision at a very high cost.
In order to make great decisions, you must determine the criteria ahead of time and apply these requirements to your decision-making process. For example, if you are going to hire a bookkeeper, your criteria might be that applicants have five years of experience, availability to work overtime, and knowledge of your specific bookkeeping software.
However, just identifying your criteria is not enough. You must also weight them according to their importance. For example, experience could be weighted at 60 percent, availability to work overtime could be 10 percent and knowledge of the bookkeeping software could be 30 percent. Weighting the criteria can be really helpful when ranking the candidates or alternatives.
An entrepreneur was evaluating possible locations for his new restaurant. His initial criteria were the traffic count, parking area and neighborhood demographics. On the initial pass, prior to applying weights, the entrepreneur selected one location based on these criteria. Once the entrepreneur applied weights to the criteria, however, the first location was tossed in favor of a second location that better met the owner’s requirements.
I guarantee that if you take this approach, you will make much better decisions. Now go out and fine tune your decision-making process by identifying criteria and weighting them according to importance.
You can do this!
Sunday, June 12, 2011
Your Beliefs
“If you don't change your beliefs, your life will be like this forever. Is that good news?” ~Dr. Robert Anthony
All of us have a set of beliefs that guides us through this life we live. These beliefs might be something like “theft is bad” or “with hard work I can achieve anything.” There are, unfortunately, a bunch of beliefs that we do not even realize we have, and these unconscious beliefs tend to shape our behavior. If we are responding to events around us without recognizing the forces that are driving us, it is a recipe for disaster.
We were helping one woman who was struggling with her restaurant. Her husband had just lost his job, and she had to keep the restaurant going as it was now their only source of income to care for their ill son. There was just no other viable alternative.
After working with her for months, I could see that she was a business owner who really wanted to be successful, but she just could not put the pieces together no matter how hard I coached her. In my last conversation with her, I tried to get her to see that in order to make a decent income, she would have to go out and sell her catering services. While we both knew this was her best alternative, she just could not break free to put the plan into practice.
As I was talking to her about this paradox—wanting something to happen but being unable to make it happen—she finally admitted the reason she did not go out and sell more is because she was afraid her staff would think less of her if she was not in the restaurant cooking. I replied, “So you are letting the feelings of your staff determine whether you succeed or not?” A light seemed to go on as she came to the realization that this belief—a belief she had not even known she had—was destroying her business and her life.
As she left our meeting, I could tell she was walking lighter because the burden of that belief had been lifted by exposure. While it is too early to tell how successful she will be, at the very least, she has the opportunity to succeed now that she no longer has an unknown anchor dragging her under.
Another entrepreneur has been struggling for more than five years with flat sales and very little forward progress. When I got to talking with this entrepreneur, he discovered that he had an unknown belief that he did not deserve to be successful. On the outside, he has the appearance of someone who is very aggressive and successful, but his belief is keeping him from truly realizing his potential.
In most cases, beliefs form because they served us well at some point in our lives. However, as circumstances change, some beliefs become obsolete and no longer serve us at all. A great way to ascertain whether an unconscious belief is holding you back is to ask a family member or close friend—someone who can be very candid with you. Typically, once these beliefs are recognized, they dissipate and no longer affect behavior.
No go out and make sure that you and your business are not being held back by a belief that is no longer valid.
You can do this.
All of us have a set of beliefs that guides us through this life we live. These beliefs might be something like “theft is bad” or “with hard work I can achieve anything.” There are, unfortunately, a bunch of beliefs that we do not even realize we have, and these unconscious beliefs tend to shape our behavior. If we are responding to events around us without recognizing the forces that are driving us, it is a recipe for disaster.
We were helping one woman who was struggling with her restaurant. Her husband had just lost his job, and she had to keep the restaurant going as it was now their only source of income to care for their ill son. There was just no other viable alternative.
After working with her for months, I could see that she was a business owner who really wanted to be successful, but she just could not put the pieces together no matter how hard I coached her. In my last conversation with her, I tried to get her to see that in order to make a decent income, she would have to go out and sell her catering services. While we both knew this was her best alternative, she just could not break free to put the plan into practice.
As I was talking to her about this paradox—wanting something to happen but being unable to make it happen—she finally admitted the reason she did not go out and sell more is because she was afraid her staff would think less of her if she was not in the restaurant cooking. I replied, “So you are letting the feelings of your staff determine whether you succeed or not?” A light seemed to go on as she came to the realization that this belief—a belief she had not even known she had—was destroying her business and her life.
As she left our meeting, I could tell she was walking lighter because the burden of that belief had been lifted by exposure. While it is too early to tell how successful she will be, at the very least, she has the opportunity to succeed now that she no longer has an unknown anchor dragging her under.
Another entrepreneur has been struggling for more than five years with flat sales and very little forward progress. When I got to talking with this entrepreneur, he discovered that he had an unknown belief that he did not deserve to be successful. On the outside, he has the appearance of someone who is very aggressive and successful, but his belief is keeping him from truly realizing his potential.
In most cases, beliefs form because they served us well at some point in our lives. However, as circumstances change, some beliefs become obsolete and no longer serve us at all. A great way to ascertain whether an unconscious belief is holding you back is to ask a family member or close friend—someone who can be very candid with you. Typically, once these beliefs are recognized, they dissipate and no longer affect behavior.
No go out and make sure that you and your business are not being held back by a belief that is no longer valid.
You can do this.
Sunday, June 5, 2011
Knowing When to Change Your Business Model
No matter how far you have gone on a wrong road, turn back.” ~Proverb
Being realistic about what is possible and, more importantly, what is impossible, is absolutely critical when running a business. There come times in most entrepreneurs’ lives when they will not be able to accomplish the task they have set their sights on. Recognizing this is not a sign of weakness, but a sign of strength. Being realistic about what is achievable is so important as it keeps you from wasting energy trying to move an immovable wall.
We were helping a very neat couple who was working so hard to make their business successful. After four years of laboring, the business had stalled at $1 million in sales. They were struggling since they had not been taking much money out for themselves in the hopes that the business would gradually improve and they could recoup some of the dollars they had invested. But no matter what they did, their sales remained flat. They came to us for help improving their sales efforts and a number of other areas of the business. They figured if we improved some of these other areas, sales would follow.
Trying to help them was so frustrating for me. These clients did everything I asked and had good results in every area except for sales. They were just working so hard without much to show for it. With clients that are both good people and hard workers, it is very frustrating to watch them give it their all and still fall short of the results we all are hoping for.
Finally, exasperated with the lack of results, we had one of those serious and life-altering conversations about whether the cause was something they were or were not doing or market conditions. We all agreed that the market was fully saturated and there was very little they could do now to improve sales.
Once they understood that it was impossible to gain market share effectively – there was just nowhere to go – we began discussions about other services they could potentially offer to differentiate themselves from their competitors. They determined they could add three or four additional products and services to their mix to revive their business. I really believe that with some time and energy, they will be able to grow their business by concentrating on these additional areas.
Another firm we were assisting was having a tough time staying competitive in the Tallahassee market. The State was spending less and less, which was significantly impacting the firm’s sales. I tried over and over to help this entrepreneur realize that he was swimming upstream and that no amount of hard work would ever change that. I am very concerned about this business as the entrepreneur has yet to recognize that in order to survive, he must change.
Now go out and make sure that you are competing in markets where your business can grow and increase profitability. If your sales – either overall or of a specific product or service – stall for longer than two years, you need to consider how you can expand into other markets. Working harder is not always the answer.
You can do this!
Being realistic about what is possible and, more importantly, what is impossible, is absolutely critical when running a business. There come times in most entrepreneurs’ lives when they will not be able to accomplish the task they have set their sights on. Recognizing this is not a sign of weakness, but a sign of strength. Being realistic about what is achievable is so important as it keeps you from wasting energy trying to move an immovable wall.
We were helping a very neat couple who was working so hard to make their business successful. After four years of laboring, the business had stalled at $1 million in sales. They were struggling since they had not been taking much money out for themselves in the hopes that the business would gradually improve and they could recoup some of the dollars they had invested. But no matter what they did, their sales remained flat. They came to us for help improving their sales efforts and a number of other areas of the business. They figured if we improved some of these other areas, sales would follow.
Trying to help them was so frustrating for me. These clients did everything I asked and had good results in every area except for sales. They were just working so hard without much to show for it. With clients that are both good people and hard workers, it is very frustrating to watch them give it their all and still fall short of the results we all are hoping for.
Finally, exasperated with the lack of results, we had one of those serious and life-altering conversations about whether the cause was something they were or were not doing or market conditions. We all agreed that the market was fully saturated and there was very little they could do now to improve sales.
Once they understood that it was impossible to gain market share effectively – there was just nowhere to go – we began discussions about other services they could potentially offer to differentiate themselves from their competitors. They determined they could add three or four additional products and services to their mix to revive their business. I really believe that with some time and energy, they will be able to grow their business by concentrating on these additional areas.
Another firm we were assisting was having a tough time staying competitive in the Tallahassee market. The State was spending less and less, which was significantly impacting the firm’s sales. I tried over and over to help this entrepreneur realize that he was swimming upstream and that no amount of hard work would ever change that. I am very concerned about this business as the entrepreneur has yet to recognize that in order to survive, he must change.
Now go out and make sure that you are competing in markets where your business can grow and increase profitability. If your sales – either overall or of a specific product or service – stall for longer than two years, you need to consider how you can expand into other markets. Working harder is not always the answer.
You can do this!
Sunday, May 29, 2011
Your Physical Facilities Are Part of Your Business
Some people see the cup as half empty. Some people see the cup as half full. I see the cup as too large.” ~George Carlin
First impressions are so important, and entrepreneurs need to remember that a business’ first impression is made by its physical appearance. If you bring a potential client to your facilities and it looks as if you have not made any improvements in 30 years, they are not going to be inclined to work with you.
We were working with a very successful business that had high sales levels and was growing incredibly fast. The business operated predominantly online, and as it grew, they never took the time to step back and evaluate the physical appearance of their operation as a customer would. They just never had the inclination to invest in keeping their premises up.
On one occasion, a large customer stopped in and, after seeing the condition of the facility, refused to order anything from them again. The customer just could not believe it was a quality operation based on the way they kept their building and facilities. The business owner was shocked by this occurrence. Until this incident, he did not recognize they had a problem.
Another business we were assisting was operating out of their home office in an effort to keep their brick and mortar investment at a minimum. Normally, this was not a problem as they were able to meet customers at various coffee shops. However, a client showed up unexpectedly one day at the home and, after seeing their physical facilities, concluded it was no longer a viable business.
A third business had a nice location, but their warehouse was a disorganized disaster. When a couple of customers got a look at the warehouse behind the counters, they wanted to stop doing business with the firm.
Finally, a business was located in such a bad area of the city that many prospective customers refused to go there. In the interests of keeping their costs at a minimum, the firm had chosen a terrible location, forgetting about how important first impressions are. This business had so much potential, as they had a product that many customers desired, but the location was so bad it made a terrible first impression and significantly affected their sales.
For many entrepreneurs, it is difficult to judge their own business objectively. Frequently, they operate in the same environment for so long they just lose the ability to see their business without bias. One way to get an impartial assessment is to ask an outsider to come in and evaluate your firm’s first impression. In many cases, I have seen these outsiders give great advice at little to no cost.
Now go out and make sure that your business is making the best first impression possible.
You can do this.
First impressions are so important, and entrepreneurs need to remember that a business’ first impression is made by its physical appearance. If you bring a potential client to your facilities and it looks as if you have not made any improvements in 30 years, they are not going to be inclined to work with you.
We were working with a very successful business that had high sales levels and was growing incredibly fast. The business operated predominantly online, and as it grew, they never took the time to step back and evaluate the physical appearance of their operation as a customer would. They just never had the inclination to invest in keeping their premises up.
On one occasion, a large customer stopped in and, after seeing the condition of the facility, refused to order anything from them again. The customer just could not believe it was a quality operation based on the way they kept their building and facilities. The business owner was shocked by this occurrence. Until this incident, he did not recognize they had a problem.
Another business we were assisting was operating out of their home office in an effort to keep their brick and mortar investment at a minimum. Normally, this was not a problem as they were able to meet customers at various coffee shops. However, a client showed up unexpectedly one day at the home and, after seeing their physical facilities, concluded it was no longer a viable business.
A third business had a nice location, but their warehouse was a disorganized disaster. When a couple of customers got a look at the warehouse behind the counters, they wanted to stop doing business with the firm.
Finally, a business was located in such a bad area of the city that many prospective customers refused to go there. In the interests of keeping their costs at a minimum, the firm had chosen a terrible location, forgetting about how important first impressions are. This business had so much potential, as they had a product that many customers desired, but the location was so bad it made a terrible first impression and significantly affected their sales.
For many entrepreneurs, it is difficult to judge their own business objectively. Frequently, they operate in the same environment for so long they just lose the ability to see their business without bias. One way to get an impartial assessment is to ask an outsider to come in and evaluate your firm’s first impression. In many cases, I have seen these outsiders give great advice at little to no cost.
Now go out and make sure that your business is making the best first impression possible.
You can do this.
Sunday, May 22, 2011
Asking The Right Questions.
““A sudden bold and unexpected question doth many times surprise a man and lay him open.” ~ Francis Bacon
I was helping two wonderful ladies who own their own public relations and marketing firm. They had been working together for more than seven years, but they only had less than $100,000 in revenues last year.
They had taken other part-time jobs to make ends meet, but otherwise, they did not seem to be overly concerned with the lack of adequate revenue. In fact, when I asked them about it during numerous conversations, they just said over and over again that they did not know what to do and had basically given up.
When I probed further and asked why they did not have enough clients, they blamed the customers, they blamed the economy, but they never took any responsibility themselves. They just expected some miracle to give them great revenues and profits, which of course, did not work out.
Their situation was so surprising to me. These ladies help other firms with their marketing but had clearly forgotten how to apply these skills to their own business.
I asked another question that made them more receptive to our discussions. I asked them, “If you were called in as a marketing consultant for a firm that had the track record that you have, what would you do?” This one question allowed them to clearly see the big hole they had dug for themselves and forced them to look at their situation with a different set of eyes.
They knew they needed to do something to reenergize their business, and they are now spending one day a week on marketing efforts. They have started calling on former customers and are exploring alternative markets that might work for their business.
Did I fix the problem? No. I just asked the right question allowing them to see their situation from a different vantage point and recognize what needed to be done.
It was far more beneficial for them to figure out the problem on their own instead of having me just tell them. If I would have just given them the answer, they would not have owned the solution, which is so important.
In all my 40+ years of teaching at various universities, I have always used the Socratic method with my students. The key to this method is asking the right questions to allow the students to figure out the solution to a real life problem for themselves. Just giving someone an answer is quick, but it does not instill any real sense of ownership of the solution.
So how does an entrepreneur realistically apply this concept to their business? When a staff member comes to you with a problem, benignly guide them by asking the questions that will reveal the best solution. Following are a few examples of these types of questions:
• If you were to do it over again, what would you do differently?
• What are the ramifications if we do not do this project?
• If you were called in as an outside consultant, what would you recommend?
Now go out and make sure that you are helping your staff figure out the solutions to their problems by asking probing questions. While initially this is a slow process, in the long run, it has so many benefits.
You can do this!
I was helping two wonderful ladies who own their own public relations and marketing firm. They had been working together for more than seven years, but they only had less than $100,000 in revenues last year.
They had taken other part-time jobs to make ends meet, but otherwise, they did not seem to be overly concerned with the lack of adequate revenue. In fact, when I asked them about it during numerous conversations, they just said over and over again that they did not know what to do and had basically given up.
When I probed further and asked why they did not have enough clients, they blamed the customers, they blamed the economy, but they never took any responsibility themselves. They just expected some miracle to give them great revenues and profits, which of course, did not work out.
Their situation was so surprising to me. These ladies help other firms with their marketing but had clearly forgotten how to apply these skills to their own business.
I asked another question that made them more receptive to our discussions. I asked them, “If you were called in as a marketing consultant for a firm that had the track record that you have, what would you do?” This one question allowed them to clearly see the big hole they had dug for themselves and forced them to look at their situation with a different set of eyes.
They knew they needed to do something to reenergize their business, and they are now spending one day a week on marketing efforts. They have started calling on former customers and are exploring alternative markets that might work for their business.
Did I fix the problem? No. I just asked the right question allowing them to see their situation from a different vantage point and recognize what needed to be done.
It was far more beneficial for them to figure out the problem on their own instead of having me just tell them. If I would have just given them the answer, they would not have owned the solution, which is so important.
In all my 40+ years of teaching at various universities, I have always used the Socratic method with my students. The key to this method is asking the right questions to allow the students to figure out the solution to a real life problem for themselves. Just giving someone an answer is quick, but it does not instill any real sense of ownership of the solution.
So how does an entrepreneur realistically apply this concept to their business? When a staff member comes to you with a problem, benignly guide them by asking the questions that will reveal the best solution. Following are a few examples of these types of questions:
• If you were to do it over again, what would you do differently?
• What are the ramifications if we do not do this project?
• If you were called in as an outside consultant, what would you recommend?
Now go out and make sure that you are helping your staff figure out the solutions to their problems by asking probing questions. While initially this is a slow process, in the long run, it has so many benefits.
You can do this!
Sunday, May 15, 2011
Small Business and the Fair Standards Labor Act
In law, nothing is certain but the expense.” ~Samuel Butler
I am by no means an advocate for more government regulation, but when in place, we all must follow the law. The Department of Labor, Wage and Hour Division administer the Fair Labor Standards Act (FLSA), and because there is no minimum number of employees for enforcement, it applies to almost every business whose sales are in excess of $500,000.
Whether or not the FLSA is reasonable can be argued, but the fact is, it is the law and it is being enforced. Last year, the Department of Labor hired 250 additional investigators just to look into whether firms are adhering to this law, and the number of court cases involving FLSA violations is increasing by more than 70 percent each year.
Overtime pay is one of the key areas of focus. So many businesses are not compliant with the FLSA overtime pay mandates, nor do they keep adequate records, which are critical when facing investigation by the Department of Labor. If it is found that you have not paid your employees correctly, you will have to repay the employees in addition to a stiff penalty for not following the law.
A major piece affecting overtime pay is classifying employees as exempt or non-exempt. The Department of Labor has identified specific conditions defining exempt and non-exempt employees. These guidelines are detailed on their website.
If a non-exempt employee works more than 40 hours a week, they must be paid overtime at a rate of at least one and a half times their normal salary. For example, if a non-exempt staff member sits at their desk doing business during lunch, this would be considered time worked. Because of this law, some firms tell their employees that they must leave their desk during lunch to ensure that they are not working.
Even if your business has a policy stating that overtime is not allowed or requires prior approval, you will still have to pay when a non-exempt staff member works more than 40 hours. In addition, the FLSA mandates the employer will still have to pay even if the employee waives their right to be paid for their time.
The most troubling part of this law is the “off the clock” time. Employers must be so careful with this. For example, if you sent e-mails or texts to a non-exempt employee in the evening, this could and would probably be construed as overtime. For this reason, some employers only permit e-mails to non-exempt employees during their normal work hours.
The FLSA, like so many other labor laws, is so complex and expansive. For this reason, it is really so easy to violate it without even realizing. To be absolutely certain your business is in compliance, you really should seek guidance from an HR professional or labor attorney.
Now go out and make sure you are abiding by the labor laws affecting your company.
You can do this.
I am by no means an advocate for more government regulation, but when in place, we all must follow the law. The Department of Labor, Wage and Hour Division administer the Fair Labor Standards Act (FLSA), and because there is no minimum number of employees for enforcement, it applies to almost every business whose sales are in excess of $500,000.
Whether or not the FLSA is reasonable can be argued, but the fact is, it is the law and it is being enforced. Last year, the Department of Labor hired 250 additional investigators just to look into whether firms are adhering to this law, and the number of court cases involving FLSA violations is increasing by more than 70 percent each year.
Overtime pay is one of the key areas of focus. So many businesses are not compliant with the FLSA overtime pay mandates, nor do they keep adequate records, which are critical when facing investigation by the Department of Labor. If it is found that you have not paid your employees correctly, you will have to repay the employees in addition to a stiff penalty for not following the law.
A major piece affecting overtime pay is classifying employees as exempt or non-exempt. The Department of Labor has identified specific conditions defining exempt and non-exempt employees. These guidelines are detailed on their website.
If a non-exempt employee works more than 40 hours a week, they must be paid overtime at a rate of at least one and a half times their normal salary. For example, if a non-exempt staff member sits at their desk doing business during lunch, this would be considered time worked. Because of this law, some firms tell their employees that they must leave their desk during lunch to ensure that they are not working.
Even if your business has a policy stating that overtime is not allowed or requires prior approval, you will still have to pay when a non-exempt staff member works more than 40 hours. In addition, the FLSA mandates the employer will still have to pay even if the employee waives their right to be paid for their time.
The most troubling part of this law is the “off the clock” time. Employers must be so careful with this. For example, if you sent e-mails or texts to a non-exempt employee in the evening, this could and would probably be construed as overtime. For this reason, some employers only permit e-mails to non-exempt employees during their normal work hours.
The FLSA, like so many other labor laws, is so complex and expansive. For this reason, it is really so easy to violate it without even realizing. To be absolutely certain your business is in compliance, you really should seek guidance from an HR professional or labor attorney.
Now go out and make sure you are abiding by the labor laws affecting your company.
You can do this.
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