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V O L . X X I I N O. X I I I J U N E 1 3 , 2 0 1 6 22 S M A L L B U S I N E S S F O C U S "All these are diffi cult issues for an employer to fi gure out," says Alvarez. "Suddenly, you have all these exempt salaried employees who are now non-exempt hourly employees. Now you need to make sure every- one knows what an 'hour's work' means. A lot of things you didn't have to worry about before will have to be addressed. You have to decide what you want to do regarding these problems. Managers will need training — for example, when people can take a break." Retail sector challenged Dugal says the average salary for Maine restaurant managers is $40,000. But there are signifi cant diff er- ences depending on the part of the state where those managers actually work, he says, with restaurants in western, northern and far Downeast Maine paying on average $30,000 to $35,000, while a "small cadre in Portland" and southern Maine might be paying closer to the new $47,476 overtime threshold. "Getting someone from $40,000 to $47,476 is a seri- ous challenge," he says, adding that getting someone who's in the $30,000 to $35,000 range up to that level is probably impossible for most restaurant owners. Dugal also serves as CEO and president of the Maine Innkeepers Association, another important leg of Maine's hospitality and tourism industry, which employs another 15,000 to 17,000 workers at roughly 500 lodging establishments throughout the state. ose members have similar concerns about the new OT rules, he says, largely because they also have tight margins, experience seasonal shifts in workload and have front-line managers who sometimes step in and do the same work as the people they supervise. Curtis Picard, executive director of the Retail Association of Maine, says Maine's retail sector employs roughly 90,000 workers, with 70% being employed by the association's 350 members that tend to be the larger retail stores in the state. "Retail is not a Monday-through-Friday, 9 a.m. to 5 p.m., kind of business," he says. "Most are open seven days a week and put in a 12-hour day or more. So, you're looking at a 60-plus-hour typical work week." Picard says Maine retailers typically manage those challenges with a mix of full- and part-time hourly and salaried employees. e option of put- ting a longtime salaried employee back on an hourly wage is not something they want to do, he says. But many of those retailers also don't have the leeway to raise the salaries up to the $47,476 threshold to keep those full-time employees exempt. "Nobody has talked much about the automatic increase that takes place every three years," he adds, noting that for a small rural state like Maine, increases tied to a national benchmark will make the OT threshold an even more unreasonable bur- den for employers to bear going forward. Although he's aware that there are nullifi cation bills moving through both the U.S. House and Senate, Picard isn't counting on the new OT rule being tossed out — at least during the Obama administration. "I'm pretty much a realist," he says. " e presi- dent is very committed to the Department of Labor's rule. It will take a two-thirds vote in both the House and Senate to override a veto. Getting that two-thirds is a pretty tall order." "I certainly wouldn't count on a legislative fi x," agrees Joanna Bowers, a Verrill Dana associate who works in the fi rm's labor and employment group. "We want employers to be ready for this." James McCarthY, Mainebiz senior writer, can be reached at JmccarthY @ mainebiz.biz and @ JamesMainebiz » C O N T I N U E D F RO M P R E V I O U S PA G E Gain time and reliability Call to start you transition to the cloud today Gain time and reliability Call to start you transition to the cloud today Your Custom IT Resource 207.729.7600 www.bekinc.net 9 Industrial Parkway #1, Brunswick 207.729.7600 www.bekinc.net Four options for meeting the federal overtime rules Douglas P. Currier, a partner at Verrill Dana in Portland, offers four suggestions for how companies can approach the new overtime rule: 1. Raise the salary to $47,476 or higher and keep the employee exempt from overtime This maintains the exempt status of employees whose duties are truly those of an executive, administrative or professional employee and is most feasible for employees whose salaries are close to the new salary level and who regularly work overtime. The greater the distance between the employee's current salary and the new threshold, Currier says, the less likely that an employer will chose this option. "We know from what our clients have told us already that many of them aren't going to raise their employ- ees to $47,476," he says. "They're telling us, 'It's not in the budget. It's not an option.' So this isn't going to mean everyone gets a lot more money than they had before." 2. Pay overtime in addition to the employee's current salary when necessary Employers can continue to pay their newly overtime-eligible employees the same salary, ask them to keep track of their time and pay a time-and-a-half overtime wage if they work more than 40 hours in a given week. This approach may work for employees who work 40 hours or fewer in a typical work week but have occa- sional spikes requiring overtime that employers can plan for and budget the extra pay during those periods. To determine the OT pay rate, divide the weekly salary by 40 and multiply by 1.5. 3. Evaluate and realign hours and staff workload Employers have the option of making sure that workload distribution and staffi ng levels are managed appro- priately for their white-collar workers who earn below the new $47,476 salary threshold. In some cases, Currier acknowledges, that analysis might point to the need to hire additional workers. 4. Put the salaried employee on an hourly wage Currier illustrates this option by supposing an employer has a salaried worker making a $40,000 a year and typically working a 50-hour week. That translates to a $770 per week paycheck. If that employer wants to keep the worker's yearly salary and hourly workload the same, he says, they could offer a $14 hourly wage, which at 40 hours translates to $560 in wages. And then, for the additional 10 hours of a typical week, pay a $21 hourly wage at time-and-a-half resulting in an additional $210 in weekly wages. Although this approach keeps the employee's yearly wage the same, Currier acknowledges this option might not go down well with some employees.

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