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Fair Labor Standard Act: Impact and Outlook

By Jay Steinmetz

Businesses have many challenges when trying to operate and stay profitable. They seek to keep their overhead costs as low as possible, provide high-quality products and services. Business leaders need to operate while staying within regulations and government mandates that affect their industries and operations.

Recently, businesses across the country have been battling to keep up with all of the federally required changes regarding compensation. In May 2016, they were hit again when they were told the U.S. Department of Labor’s Fair Labor Standard Act (FLSA) ruling would go into effect on Dec. 1, 2016.

The FLSA ruling states that the salary threshold would be doubled to $47,476 per year to avoid exemption from paying full-time employees overtime — a monumental change that would make about 4.2 million currently exempt employees eligible for overtime pay. The ruling also states that the department will increase the salary threshold every three years. The Society of Human Resource Management states that based on current projections, the salary threshold is expected to rise to more than $51,000 with its first update on Jan. 1, 2020.

Preparing for this ruling has had a major impact on businesses with workers that fall under this salary, including facility management companies. Although the ruling was put on hold to be further reviewed, most businesses and facility management companies already made major structural changes to operations, as well as to employees’ salaries and job responsibilities. For organizations that wanted to take the financial impact, they raised their employees’ salaries to meet the requirement. Others were forced to eliminate jobs or reduce lower salary workers to hourly employees. Many facilities were forced to reevaluate employee responsibilities to change the structure of the way they operate. If parts of the worker’s responsibilities could be automated, facility management companies implemented the technology needed to do so. Organizations also removed work functions that normally would need to be completed by an exempt employee.

For facilities that have had to scale back the amount of people and overall access to buildings and equipment, they have started to seek technology solutions that require less personnel interaction. One of the solutions facilities are turning to is key tracking and locker systems. Key management solutions enable organizations to effectively manage keys — ideal for facility management companies or any business that issues and collects keys or equipment on a regular basis.

Key management solutions are a type of intelligent autonomation — automation with the human touch — that enables one employee to handle more responsibilities because they have the tools that give autonomy without the responsibility. For example, when one employee manages three buildings, that employee cannot physically be at all three locations at once. However, with the right technology, he doesn’t need to be there.

So, if a worker at one of the buildings needs access, the worker can now check out a key from a secured box on premise during a specified time instead of going through the building manager. Facilities will now be able to continue using their standard existing locks because the technology gives instant onsite access to keys on an individual basis and allows for authorization and validation without error. Furthermore, with the use of integrated ultra-high frequency (UHF) RFID and barcode technology, the key is also able to be tracked if it is taken out of the building.

In 2017, the industry can expect more technology solutions to merge that will enable businesses to move to leaner operations. The implementation of low-energy Bluetooth solution is another trend that facilities might adopt in an effort to not only meet strict regulations, like FLSA, but also stay in business. And instead of businesses eliminating jobs, they can now use their employees in more ways than one, increasing productivity and improving business operations.

Jay Steinmetz founded the company known today as Barcoding Inc. — www.barcoding.com — in 1997. In 2004, Barcoding became an Inc. 500 company and was recognized by Forbes magazine as one of 10 privately held technology companies to watch. In 2006, Steinmetz was nominated as a finalist and subsequently won the honor of Entrepreneur of the Year for the state of Maryland in Technology from Ernst & Young. Steinmetz sits on multiple boards, including the state of Maryland's Technology Development Corporation (TEDCO), with which he has held the title of chairman and treasurer. Behind Steinmetz's leadership and 24 years of experience in the automatic identification industry, Barcoding Inc. employs over 90 people in 16 states.