The Fair Labor Standards Act requires employers to pay employees in non-exempt status an overtime rate equal
Question:
The Fair Labor Standards Act requires employers to pay employees in non-exempt status an overtime rate equal to at least 1.5 times the regular hourly rate for each hour worked beyond the 40-hour work week.
ACME manufacture has signed a lucrative contract to manufacture enclosures for flashlights. The contract covers five years. During this time, ACME needs to increase its total manufacturing output by 10 percent. To meet this additional demand, the company's compensation and HR leadership will have to decide whether existing production employees will need to work additional hours per week, hire additional workers, or both. Making this decision will require analysis of compensation costs and other HR-related expenses (for example, training).
Overtime Pay Scenario: Suppose ACME employees have 1,000 production employees and each of these employees earns $20 an hour. Since production output will increase by 10 percent, each employee will need to work an additional 4 hours per week (40 hours per week × 10%). For each of these additional 4 hours, employees earn $30 per hour ($20 per hour × 1.5 hour overtime bonus).
Hiring Additional Workers Scenario: To meet this additional demand (10% output), ACME would need to increase its workforce by 10 percent or 100 employees (1,000 workforce × 10%). Besides the hourly wage, there are also costs associated with hiring new employees. These include employee benefits ($10,000 per new employee per year), onboarding ($5,000 one-time per new employee), training ($3,000 one-time per employee), and termination at contract expiration ($12,000). ) exists. period.
Identify and describe the central dilemma presented in the case
Select and collect relevant assessment areas and identify critical data and stakeholders (if you need to make assumptions about any of the facts in the case, be sure to include those assumptions in your analysis)
Gather additional information and research as needed
Identify and explore all viable possibilities for solving central problems and offer at least three different options
Choose and present the best solution and add support for decision recognizing the positions of all stakeholders
Explain how to implement the best solution and add strategies to address known challenges. Also include the possible consequences of the chosen solution.
Questions:
Is it more cost-effective for existing production workers to work overtime or hire new workers for the duration of the contract?
Suppose the unemployment rate in the region is low, making it difficult to attract new manufacturing workers. ACME sees that it can overcome this problem by paying new employees a higher wage of $25 per hour. In this scenario, is it more cost-effective to hire existing production workers on an overtime basis or to hire new workers?
Would it be more cost-effective to hire 50 new employees, with half of the existing production workers working overtime?
Dynamic Business Law The Essentials
ISBN: 978-1259917103
4th edition
Authors: Nancy Kubasek, Neil Browne, Daniel Herron