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Tips to Become a Proactive Employer

What does it mean to be a proactive employer in today’s employee market?

Our team recently dove into this issue with a deeper look at Manager and Supervisor Pay.

There may be changes on horizons with respect to wage minimums. The Fair Labor Standards Act (FLSA), which governs employee compensation in the U.S. workplace, has been getting some buzz lately. As the economic impact continues to rear its head, with speculation of a recession on the horizon, it’s just like the popular Hamilton musical says, “History has a way of repeating itself”. Pending the October 2022 speculated announcement of a proposed salary threshold increase by the Biden administration, local employers may really start to feel the heat. Are you ready?

History has its eyes on us:

If we time travel back to 2016, employers first started to feel the pressure during the Obama administration when there was talk about raising the minimum salary from $455.00 per week ($23,660 annually) to $913.00 per week ($47,476 annually). This proposal was opposed by federal courts and eventually withdrawn by the Trump administration. Fast forward to 2020, where the Department of Labor (DOL) responds, to the underlying economic conditions, by increasing the salary threshold. This increase went into effective January 1, 2020, improving the $455.00 per week ($23,660 annually) to $684.00 per week ($35,568 annually). The question becomes, where do we go now?

Rise Up:

As a result of the recent chatter surrounding another potential increase in the salary threshold for supervisors and managers, many business owners are fearful that the current administration could be seeking double the weekly wage. A rise like this may put business owners cash flow as risk. With this potential increase, coupled with the volume of workers who would now be eligible for overtime pay, here are a few ways you can prepare:

  • Review and update employee job descriptions; specifically identify job duties and required work hours on a weekly basis. Determine whether the job responsibilities meet the requirements under the proposed minimum salary thresholds.
  • Review worked hours on a weekly basis, by employee, and identify roles or positions that may need to be converted from an hourly position to a salaried one. If a position requires 40 hours or less per week, converting the position from salaried to hourly, would result in the employer not being impacted by the potential salary threshold increase for that position. The flip could also be true where it may be beneficial to convert an hourly position to a salaried one.

Look Around, Look around:

Reviewing the above will reduce potential employee misclassification and possibly reduce the need to pay overtime. It is important to ensure that employees are appropriately classified and are compensated appropriately for hours worked.

If you would like to talk to one of our professionals in our Entrepreneurial Support & Client Accounting Segment on this topic or any other business related topic, please do not hesitate to contact us.

About the Author

Lindsay Young

Lindsay joined McKonly & Asbury in 2003 and is currently a Principal with the firm. She provides audit, tax, and consulting services, with an emphasis on family-owned business. Lindsay is a leader in the firm’s Outsourced Accounting… Read more

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