Starting January 1, new overtime rules kick in that will make millions more empl

Question

Starting January 1, new overtime rules kick in that will make millions more employees qualify for overtime pay. The changes include a dramatically higher pay threshold that determines whether workers are eligible for overtime at a rate of at least one and one-half times their regular pay. With a few months of lead time, employers need to take a look at their operations and decide how to incorporate the changes. Please research the details of the new rule and what companies are proposing to do to get around the new standards and/or to stay profitable. A couple of examples are that some have suggested going to hourly pay and reducing hours available or cutting the workforce.

Please give a short description of yours company “Tea Shop” and describe the position that will be affected by this new "rule." You will explain the important factors like your budget, workforce limitations, the times or situations when this worker would be called to work more than 40 hours a week (perhaps peak season or when quarterly reports are due, etc), and what you propose to do to comply with the "rule" without affecting the profitability of your company. How will this affect your production levels or levels of service? What do you think your competition will do in this situation and how does your plan seem to be better long-range than theirs?

Explanation / Answer

Tea shop:

Tea shop is a small company situated in an industrial area mainly catering to the professional who is working in nearby companies. The Company offers tea service, snacks, Cigarettes and mints to its customer. The company has its peak time during 5 working days and will remain open in night also thus catering to the night customers.

The company has an impact on its budget because the earlier company is filling the gap between Day shift and Night shift employee by making them work extra during peak time but with the change in rule. The company will have to shed extra money for getting extra work. It will be beneficial for the company to implement the rule on hourly pay basis. In this company the requirement of workforce will be continuous and follow the same trend except in case of external factor thus no impact on current workforce situation occurs. The workers can be called for more than 40 hours in a case if there is scheduled party or any occasion in nearby companies or if there is an extra order from those companies. In this situation the company can plan up the workforce requirement plan in advance.

The Company can implement the rule using hourly based rate because the requirement of extra hour occur only on few days thus company can create a load plan and see the peak time of the day. The company can call 80% of current strength in the morning at same time and remaining 20% after 2 hours of normal time i.e break one shift into two to match the demand in between two shifts .In this way, the company can try to keep its profitability intact and also implement the new rule.

There will be no impact on the production level but the service level can be improved because the employee feel happy about the implementation of new rule with minor change in normal working time of few employees.

Author's Note: Please be specific about the question to be answered.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.