This week in Homebase News we cover the Department of Labor’s overtime pay expansion, the upcoming difficulty of seasonal hiring, Amazon’s new small business awards, and more. Read below to get the details on these stories and other happenings involving local businesses and hourly workers.
U.S. Department of Labor Expands Overtime Pay
The U.S. Department of Labor issued a final ruling making the new salary threshold for overtime exemption $684 per week, or $35,568 per year.
The Department of Labor estimates that 1.2 million people will gain overtime eligibility under this new rule. Those most likely to be impacted are retail and restaurant managers who qualify for exemption under the duties test, but have low salaries.
The increase comes after the Obama administration proposed an increase to $47,476 in 2016. It was struck down by a court ruling, but this increase is unlikely to face the same fate as its much lower than its predecessor and the formula used was the same one that was used to calculate the threshold when it was changed in 2004.
Retailers Could Have Trouble Finding Good Seasonal Employees This Year
Competition for seasonal workers is expected to be tougher than ever this year for retailers amidst low unemployment and healthy holiday sales forecasts. Thanks to the competition and new digital platforms that allow seasonal workers to hunt for the best-paying part-time jobs, retailers’ labor costs could go up.
“In recent years we’ve seen the holiday season become crazier and crazier in terms of the demand” for seasonal employees,” said Beatrice Pang, vice president of strategy and finance at Wonolo, which calls itself an “in-demand hiring platform.”
A report by Wonolo said the competition means companies increase their seasonal employee hourly wage rate by 8% during the holidays, and employers seeking staff members on the Wonolo platform can expect to pay an average of $15.19 an hour.
Amazon Opens Nominations for New Small Business Awards
Amazon introduced the Amazon Small Business Awards and stated that the nominations are open for businesses who sell through Amazon’s stores. The online giant said the goal of the awards are to celebrate inspiring and unique American small businesses in three categories: Small Business of the Year, Woman-Owned Small Business of the Year, and Small Business Owner Under 30 of the Year.
Winners will receive six months of dedicated Amazon Seller or Vender account management, Amazon search advertising credits, promotion on Amazon.com, and a trip to Amazon’s headquarters in Seattle.
Nominations will end at 11:59 p.m. on Sunday, October 6.
70% of Workers Likely to Quit if Paid Current Federal Minimum Wage
A recent analysis of tens of thousands of small businesses found that employees who earn the current minimum wage of $7.25 per hour have a 70% chance of leaving the position within a year, which is double the national turnover rate average of 32%.
The research, which was conducted by HR and benefits company Gusto, found that the turnover rate dropped significantly to 41% at $15 per hour, proving that there is a strong correlation between hourly wage thresholds and turnover rates.
Seattle also looked into turnover rate after the minimum wage was increased in the city and found that it declined significantly. The research also found that employees were working less hours because they could earn more in less time, which meant that employers could make up for the added costs by paying for fewer total hours worked.