Ok, I know you probably have heard all about the ruling the DOL has put concerning the fiduciary standards. BUT WAIT, the DOL has done even more damage. For a government agency that none of us elected nor do we have any say in its decisions, it has recently caused serious problems on two fronts for our industry. I will leave the fiduciary rules to those that have waded through the over 1,000 plus pages of governese language. Better yet, I suggest you attend the NAIFA DOL workshop coming soon. Instead, I will concentrate on a second decision that affects our clients on a more encompassing manner. I refer to the Fair Labor Standards Act that doubled the amount of income that must be paid to salaried employees. Not only that but it placed undue hardship on many small employers who are the trainers of tomorrow’s workforce. It will also affect the young and aggressive employee who is trying to get ahead. I know when I was young, my goal was to get ahead and I was willing to go beyond my forty hour week to prove my extra value. That opportunity would not be available under the new ruling. So why go through this process. Well, kind of goes back to my blog about minimum wage. Who wins when you increase minimum wage or under this new act? Not the consumer, prices of goods and services have to increase. Not the employee, they now are subject to these higher costs as they are the consumers. The only winner in this situation is the Government. They increase their coffers as they collect higher revenue as the wage base increases.
The other problem with this ruling is who is considered exempt and who is not. Much of the language in the Act is left open to interpretation. For example, the word “significant” shows up 125 times in the 508 pages. Since significant is not defined, it is left to each individual to determine its meaning. The problem is that the DOL in an audit might have a completely different definition of significant. Another issue is when is an independent contractor actually an employee? One of the criteria is, are they out of the office a “significant” amount of the time? So, as a salesperson, you may have to arrange your schedule to be out of the office more. Many employees currently are allowed to earn some flexibility by working on an as needed basis. These same employees will now be required to keep track of their time. Even the opening of an email, answering a text or discussing business over a cup of coffee may require documentation.
The intent of the regulation is to prevent abuse by the employer. My contention is that if the employer is abusing the workforce, the workforce leaves and goes elsewhere. This regulation will do more harm than good to the majority of the employee base. It is another prime example of “I’M FROM THE GOVERNMENT AND I AM HERE TO HELP.” Very similar to the ACA phrase, “YOUR COST OF HEALTH INSURANCE WILL DROP BY $2,500 A YEAR PER FAMILY”.