Your Business Instincts May Not Work Against Regulations
{2:25 minutes to read} New regulations enacted to increase the standard of living of lower paid workers may stimulate the economy in the long-term, but in the short-term employers are feeling the effect of the added expense. Combined with increased competition and high rent and occupancy costs, many employers are desperate to find ways to remain profitable.
A flurry of regulation has significantly escalated the cost of employment for employers throughout New York City and beyond. While the increases in minimum wages have, perhaps, garnered the most publicity, recently enacted regulations directed at overtime, healthcare, expansion of paid family leave and mandatory sick time have proven costly and disruptive to employers. My clients’ instincts, like those of most savvy business people, are to find ways to avoid or lessen the cost impact of such regulations.
A Lesson from Dave & Buster’s
One of the ways to lessen the impact of many regulations is to reduce the number of hours that employees work each week; sometimes a transition from full-time to part-time hours. By working fewer than a threshold number of hours, the requirements to provide certain employee benefits are not triggered.
Make sense? Perhaps not.
Dave & Buster’s agreed to pay $7.425 million to settle a class action lawsuit for a case that accused the restaurant chain of reducing workers’ hours to deprive them of healthcare benefits.
Solutions for Employers
Impulsive actions that deprive workers of their entitlement to benefits — in response to newly enacted regulations — may expose employers to liability. Also, most employers are in service businesses. They hired a certain number of workers in the first place to ensure quality customer service. Reducing the number of employees or their hours will expectedly diminish customer service. In some instances, investments in technology can make up for a diminished workforce.
To lessen exposure, it is imperative that employers develop a sound strategy to manage their workforce. This can be done through consultation with professionals such as an attorney or accountant, and the implementation of workforce management software.
You can’t afford to act impulsively. Contact Levine Law, LLC at (516) 921-6700 to discuss your current workforce practices and implement a strategy to help you balance cost-saving and risk.
Harlan Levine
Tel. (516) 921-6700
[email protected]
