Palm Beach County Accounting – Minimum Overtime Exempt Thresholds 2016

Many of you may have heard that on May 8, 2016 the Department of Labor (DOL) has changed the minimum thresholds regarding the overtime exemption.  Prior to December 1, 2016 the threshold was at $23,600 annually allowing low cost salary exempt staffing in many South Florida businesses especially restaurants, resorts, and hotels.  In the hospitality business, many salary exempt staff members are required to work minimum 50 hour work weeks with many approaching 60 hours plus a week to meet their job requirements.  These rules severely limit the employers ability to continue these work practices for lower wage entry level managers.

The current overtime exemption taking effect December 1, 2016 has moved to $47,476 annually .  This will have a Overtime_Paysignificant impact on Palm Beach County businesses and will make many CFO’s lives very difficult over the next several years as they assist in determining business plans to help offset the increase.  Although this change on the surface may not seem like a significant adjustment.  Starting to track hours for those under $47,476 and paying applicable overtime will have a significant impact on the bottom line.

There are many outcomes that may result from these changes and below are a few that quickly come to mind:

  1. These rules will have a similar impact to that of the economic downturn in which businesses pushed hard to become more efficient and were able to get their team members to do much more with much less.  The lack of jobs allowed businesses to apply much more pressure to staff to increase productivity.  The job markets are currently much better than the prior downturn but in an effort to cut losses many companies will implement several productivity tactics specifically targeting this entry level management wage.
  2. Many employers may increase the wage of their salary exempt staff that are close to the new rate to continue to avoid the overtime implications.
  3. Many current salary exempt positions below the threshold will convert to hourly and some of the work load will shift to more senior salary exempt managers to reduce work loads and allow the staff member to complete their roles in under 40 hours a week.   This does not bode well for the more senior middle managers who just added 10+ a week to their work schedule.
  4. Businesses will pay the additional overtime and pass costs through to their customers via price increases and subsidies such as service charges and fees.

Hypothetical Case Study:

Palm Beach Resort
Palm Beach Resort

Looking at a mid-sized resort/hotel style business as a hypothetical scenario of cost increase.

Total Employees: 700
Salary Exempt Staffing: 200

Approximately  30%-35% of salary exempt staffing will fall below the newly implemented $47,476 threshold.  Utilizing those assumptions that identifies about 65 managers below the $47,476 minimum requirement.  Assuming an equal spread from the $26,600 to $47,476 range we end up with an approximately net wage increase of $136,095.  Add in 6.2% ($8,438) Social Security Tax, 1.45%  ($1,974) Medicare Tax, and any 401(k) Match ($1,701) and the gross cost increase equates to about $148,208.  These figures do include any ancillary costs such as workers compensation et al.

Source: Jason Bloom Accounting

PetSafe Yard & Park Remote Trainer

63627_PT1._AC_SL1500_V1448660743_PALM BEACH, FL.  I had recently moved to a new home in Trailwood development in Jupiter, FL and needed to retrain my 6 year old Black Lab on where to go to the bathroom.  He had free run of the yard at our old home so it has been an adjustment.  In the back of our home we have a concrete pool deck and our dog seem to think that going to the bathroom on the concrete is ok.  I have tried all positive reinforcement training you can think of but decided after 9 months of trying without success to break of the old Pet Safe Yard Park Remote Trainer we used to train him when he was a puppy.  When I tried to use it the controller did not work.   I decided to replace the battery and not give in and just get a new one.  The battery cost $29.95 on Amazon and I ordered it as opposed to just buying another PetSafe Yard Park Trainer for $139.95.   I removed 9 screws, unplugged the old battery Nittnay20160608_135137and plugged in the new one and presto it works fine now.  Blog reminder the path of lease resistance may seem like the be best one but it is also most likely the costly one.

Hopefully soon I will be able to update that it worked and the retraining was successful!

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Palm Beach Blog

landscapingtrailwoodWelcome to the Palm Beach Today blog.  Over the course of the past several years, I have been engaged with some do it yourself projects as well as increasing professional knowledge with continuing education.  At many points during my educational experiences, I realized that there was not a good web resource for several of the items I had encountered and that common knowledge to professionals is not all that common for a do it yourselfer or non-professional.  I have always been a strong proponent of learning new things whether it be as simple as fixing a broken sprinkler head in the yard or as complex as staying updated professionally on the ever changing Accounting standards.

I have decided to use this venue as a way to look at my day to day experiences in the Palm Beaches and Palm-Beach-Gardens-930x363share some tips and tricks.  Living in West Palm Beach, Loxahatchee, and Jupiter over the past many years there has been an accumulation of knowledge that may be helpful to new comers to Palm Beach and long-time residents alike.  These experiences stem from a personal level as well as professional.

My professional background has enabled me to have diverse experiences throughout the years.  Starting out in the hotel industry when I was in college, I spent many years in the back of the house food and accounting_jason_bloom_palm_beachbeverage operations with some great operational experiences.  After realizing that there were jobs that didn’t require you to work every weekend, I elected to obtain my masters degree in Accounting and move into a more analytical role.  I have spent many years working in Accounting in Palm Beach Gardens where I hold/held many positions including the CFO role in several companies.

This blog will take a bit of a different approach and show what day to day life is like living in Florida.  The Florida lifestyle not only includes sun and fun but also going to work, mowing the grass, irrigation repairs, pressure washing, grocery shopping, etc not to mention all the family responsibilities.  Living in paradise is great when you have time to enjoy it but you still need to get your day to day work done.  Hopefully a few tips and tricks will save some time.

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