Kitchen & Bath Design News

DEC 2016

Kitchen & Bath Design News is the industry's leading business, design and product resource for the kitchen and bath trade.

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IT'S BEEN SAID that change is the only constant. While the end of the year is traditionally a time of change, the latter part of 2016 has been a wilder-than-usual ride, between a surprising presidential election and the adop- tion of new laws addressing how employees are paid with regard to overtime. There are a lot of questions about what the presidential election will mean to the nation, the market and, specifically, to small business owners in the kitchen and bath, and re- modeling industries. Even color trends are seeing an impact from the presidential election (see related story, Page 52). But before that transition even takes place, new laws are in play that may be impacting your business right now. Earlier this month, expanded overtime laws went into effect that more than double the minimum salary require- ments for overtime pay (see related story, Page 14) and may require changes to how companies track employees' time on the job. Previously, employers were only required to pay over- time to those who made $23,660 a year or less – and many employees fell into a "white collar exemption" that did not entitle them to overtime pay, even if they made less than the listed salary requirement. Under the new law, however, employees making $47,476 or more per year must be paid time and a half for any hours worked in excess of 40 per week. Additionally, even higher-salaried employees could be entitled to over- time pay if they are not exempt by virtue of falling into the "executive employee" category. According to the U.S. Department of Labor, "To qualify for the executive employee exemption under the standard test, all of the following job duty requirements must be satisfied: (1) The employee's primary duty must be manag- ing the enterprise in which the employee is employed, or managing a customarily recognized department or subdivi- sion of the enterprise; (2) The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent (for example, one full-time and two half-time employees are equivalent to two full-time employees); and (3) The employee must have the authority to hire or fire other employees, or the employ- ee's suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees must be given particular weight." The provisions get even more complicated with an exemption for those whom the law views as "creative pro- fessional employees" – an exemption that many business owners and their accountants are still trying to interpret. So what does this mean for your kitchen or bath firm? If you're the owner and have salaried employees that do not currently get paid overtime, you may need to change what you pay them and how you track their time. For employees of a kitchen and bath dealership, you may face changes impacting what you get paid, how you get paid, how you clock in and more. And, for those who use subcontractors, you may need to review how you work with subs, since the IRS has been cracking down on businesses that use the "independent contractor" label for those who should actually be classified as employees. Currently, one of the key provisions for inde- pendent contractor status requires independent contractors to have substantial control over various aspects of their work, including hours worked and how the work is done. But there are other requirements as well; the new laws are complex, and may require legal assistance to interpret. Of course all of this may change under the new admin- istration. In the meanwhile, though, it's important to stay abreast of these changes and ensure that your firm is in compliance. George Bernard Shaw once said, "Progress is impos- sible without change." Of course not every change will lead to progress, but when change is driven by knowledge, progress is more likely. In the coming year, the nation is likely to see significant changes that will impact our industry. Where these changes lead us is yet to be seen; however, kitchen and bath profes- sionals should educate themselves about up-and-coming legislation and work toward meaningful changes that will positively impact our business and our world. As we close out 2016, all of us at KBDN wish you a hap- py holiday season and a prosperous New Year! ▪ " New laws regarding overtime pay may be impacting your business right now." New Laws Impact Overtime Pay December 2016 • KitchenBathDesign.com 7 EDITORIAL ® Like us: Facebook.com/ KitchenBathDesignNews Follow us on Twitter: @KBDN Join the discussion: LinkedIn.com/groups/7023676 Follow us on Instagram: @kbdn_sola PUBLISHER Paul DeGrandis PUBLISHER EMERITUS Eliot Sefrin EDITOR Janice Anne Costa MANAGING EDITOR Anita Shaw ASSOCIATE EDITOR Ashley Lapin Olian GROUP EDITORIAL DIRECTOR Patrick O'Toole CONTRIBUTING WRITERS Kim Berndtson Joe Dowd Jamie Gold, CKD, CAPS Elizabeth Richards Denise Vermeulen COLUMNISTS Ellen Cheever, CMKBD, ASID, CAPS Denise Grothouse Leslie Hart Bruce Kelleran, CKD, CPA Ken Peterson, CKD Mary Jo Peterson, CMKBD, CAPS, CLIPP Sarah Reep, CMKBD, ASID, CMG, CAPS, IIDA Eric Schimelpfenig, AKBD CREATIVE & PRODUCTION DIRECTOR Tracy Hegg CIRCULATION MANAGER Mike Serino READER SERVICE MANAGER Jeff Heine DIGITAL PROGRAMS MANAGER Tim Steingraber PROJECTS MANAGER Heidi Riedl Copyright © 2016 by SOLA Group Inc. All rights reserved. No part of this magazine may be produced in any form, including electronically, without written permission from the publisher of Kitchen & Bath Design News . JANICE COSTA EDITOR

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