Here is the latest issue of “This & That” Tuesday. I hope you find it to be informative and useful.

 

PPACA Upheld

You are probably already aware that the Supreme Court has upheld the constitutionality of the Patient Protection and Affordable Care Act (PPACA) validating the individual mandate requiring people to have health care by 2014. My advice to you is not to panic. There is still a lot of confusion about the PPACA and the actual impact on business will become clearer in the coming months. There are still many “rules” to be developed, State exchanges to be created, etc. As these things become clarified, I will be giving periodic updates on how I believe this will affect small and midsize business owners.

 

Store Managers Found to be Exempt Executive Employees

A United States District Court found that AutoZone had properly classified the store managers as exempt executives in a case brought on behalf of a nationwide class of current and former store managers seeking overtime pay under the Fair Labor Standards Act (FLSA).

 

The store managers contended they spent as much as 90% of their time working on manual (i.e., non-managerial) tasks that required rote compliance with AutoZone’s detailed, standardized policies and procedures. Therefore, the store managers contended, they were not exempt executive employees.

 

The court, however, rejected the store managers’ contention that their primary duty was customer service and satisfaction. Instead, the court recognized that AutoZone placed significant responsibilities on its store managers:

• they were the only store-level employees who conducted staff evaluations and hiring interviews;
• they were the only employees (with the exception of the customer sales manager) eligible for a bonus based on store performance;
• they were responsible for the completion of manual tasks and coordinating employee scheduling;
• and how (and when) they completed even manual tasks had an impact on overall store performance, a fact reflected in AutoZone’s criteria for evaluating their performance.

The court also rejected the argument that AutoZone had such extensive standardized processes and policies that only their manual labor mattered to store operations, pointing out that the essence of supervisory work is ensuring compliance with corporate policies.

 

The court noted that even though some store managers may perform manual tasks more than 50% of the time, that factor did not weigh significantly in this matter since many agreed they performed other tasks simultaneously with their manual tasks and retained overall managerial responsibility for store operations while performing manual tasks.

 

Small Business Owners Go Without Pay

A majority (54%) of small-business owners have gone without a paycheck — a fourth of them for a year or more — in order to keep their firms alive, according to a new survey by Citibank.

The past few years have taken a significant personal toll on U.S. business owners, according to the survey, including:

• Personal stress 63% 
• Taking less profit 78% 
• Cutting profit to pay employees rather than reduce staff 66% 
• Working more hours 70% 
• Not taking a pay check 54% 
• Going without a paycheck for a year or longer 23%

This latest survey by Citibank is starting to show some improvement in owners’ outlook for their firms’ future. More than 2 of every 5 (43%) said business conditions are positive, up from 24% in August, 2010. A third said business are better than a year ago, compared to 26% in January, 2012. Another third expect their revenues to grow more than 10% this year.

 

“Small-business owners risk everything to pursue their dreams and are willing to do what it takes to make it,” Veltre said. Small-business owners have already taken steps to boost business:

• Keep updated and knowledgeable about their field 88% 
• Spend more time with customers 70% 
• Upgrade computer systems 67% 
• Increase use of Internet and social media 52% 
• Build a network of suppliers and partner companies 51%

For the remainder of 2012, many of these respondents will be taking action to boost business:

• Increase marketing 65% 
• Negotiate better pricing on purchases 56% 
• Work longer hours 52% 
• Introduce new products or services 50%
• Use social media for marketing 49%

“Small-business owners should consider these steps as a checklist for growth and survival,” Veltre said. A small-business owner continually invests in change in order to stay relevant.”

 

Factoids

• The total employee cost share for health care is 34.4% in 2012, up slightly from 2011.
• 70% of employers said they intend to maintain their current level of benefits but 30% of them say they will do it by more cost shifting to employees.
• 46% of employees have children; however, 63% have pets! Employers might want to consider offering pet insurance as a retention tool. 
• Hip replacement surgery costs $33,000 – $57,000 in the US. It is only $8,800 in Taiwan. Did you ever consider being a medical tourist?