APRIL 2016
Southwest Florida BUSINESS TODAY
Page 15
Is your business prepared for changes to Minimum Salary Test? The Fair Labor Standards Act of 1938, as amended (FLSA) is the federal law that governs the payment of minimum wage and overtime compensation that is required when a non-exempt employee works more than 40 hours in a workweek. Further, under the FLSA an employee is classified either as exempt from the overtime provisions or non-exempt covered by the overtime provisions. In order to qualify as an exempt employee, the employee must be paid a minimum salary of at least $455 per week (currently) that is not subject to being docked for partial day absences or missed full workdays (subject to limited exceptions) and the duties test for one of the enumerated exempt positions defined under the law, e.g. the executive or supervisor exemption must be satisfied. Both are required. A salary by itself is insufficient. One of the biggest myths that persists in the business community is that paying a salary by itself makes an employee exempt from the overtime provisions. Not true. According to information that the DOL has posted on its website, the current minimum salary for an exempt employee puts an employee below the federal poverty level of $24,008. Like the minimum wage initiatives across the County, the initiative to increase the minimum salary for exempt employees is an effort to boost income for many whose wages keep them at or below the federal poverty
level. (A bill introduced during this year’s legislature by Florida Sen. Dwight Bullard, D-Cutler Bay, to increase the minimum wage to $15 per hour failed. A new bill will probably be introduced next year. Of note, if the federal minimum wage had been indexed for inflation, it would be $10.90 today. An increase to Florida’s minimum wage is coming. It is a matter of BY CHRISTINA HARRIS SCHWINN when, not if. Also note that even though Florida’s miniGuest Columnist mum wage is tied to the CPI, there was no increase this year and $8.05 is well below what the federal minimum wage would be had it been indexed for inflation.) A weekly salary of $455 per week equals $23,660 per year. Many exempt employees earn more than the minimum salary, at least now they do. However, if the United States Department of Labor’s (DOL) proposed rule issued on June 18, 2015 becomes final later this year, the minimum salary could increase to $970 per week, or $50,440 per year. No, this is not a typo. Yes, the increase is significant and will no doubt have a big impact on many Southwest Florida employers. Also note that the proposed rule
currently contains a provision that provide for annual increases to be published by the DOL annually 60 days before the effective date. At this point, whether the final regulation will set a minimum salary for exempt employees at $970 is unknown. The minimum salary could be set at a lesser amount. Business owners should review their pay practices, job classifications and prepare an analysis regarding their entire workforce by pay classification by job in preparation of this looming change. The final rule will contain an effective date. The effective date could be as early as 60 days, January 1, 2017, or there could be a phase-in period. All signals point to the DOL’s final rule being issued in July 2016 before Congress recesses. Will your business be ready when the change comes?
VETERANS PAGE 13
lature funded with a $1 million grant, points out, “A lot of them come from leadership roles in the military. They’re used to working with structure and follow-through. Now, maybe they don’t want to work for somebody else.” Announced earlier this year, the Veteran Entrepreneurship Program is a new entrepreneurial training initiative for veterans in the state seeking to start their own businesses. Anyone categorized as active duty or who has been honorably discharged with an interest in starting a new business is an ideal candidate. Veterans do not need to be enrolled at FGCU to participate.
The initial program began March 15. Over 300 veterans across the state enrolled. For more information about the program offered through the FGCU Institute for Entrepreneurship, contact program coordinator Amy Ridgway at (239) 5907324 or aridgway@fgcu.edu. Kauanui notes, “This program is a great opportunity for veterans to do something they really want to do that’s meaningful and has real impact, not only on their own lives, but when combined with all the veterans who participate in these types of programs, on local, regional and national economic levels as well.”
Knox states, “As part of the program, veterans will work with SBDC business analysts who will educate them to think like entrepreneurs; to think like a 1099 versus a W-2.” After completing the program, the SBDC team will continue to check back with graduates, helping them with access to capital and other challenges of developing an ongoing business. Kauanui, who is crafting the statewide curriculum for the nonprofit program the Florida Legis-
NOTE: This column is not intended to be a substitute for competent legal advice. Competent legal counsel should be consulted if you have questions regarding compliance with the law. Christina Harris Schwinn is a partner and an experienced community association, employment and real estate attorney with the Pavese Law Firm, 1833 Hendry Street, Fort Myers. Contact her at (239) 336-6228 or visit PaveseLaw.com.
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