Overtime Exemptions24 Sep

In another corollary to why SMBs should not hire IT employees, consider the overtime exemption rules. Montana has never adopted the overtime regulations for computer related occupations as stated in the FLSA. Many attorneys are now realizing the revenue stream available by pursuing companies on wage and hour lawsuits.

I like the fact that Montana generally favors employees in labor legislation. It makes it harder to run a business here, but we live in an area where jobs are scarce and wages are already lower than the national average. Employees need this protection. But in my opinion, this loophole in our state’s regulations needs to be fixed.

In a prior life, I had an employee who had been with the company for many years. He knew the company’s data, but as a programmer he was mediocre. He spent more time supporting applications he had built over the years than he did building anything new. And he had injected himself into many business processes because his applications “couldn’t be” hardened enough to hand off to users.

Given his longevity, this employee had a high hourly rate. All the stuff he had to do to support his applications required that he put in huge amounts of overtime. He was no longer creating value. He was no longer driving efficiency. But this employee ended up making more money than nearly anyone else in the department.

If you’re an SMB in Montana, make sure all your IT employees are properly classified and pressure your legislators to eliminate this loophole. But most of all, consider shifting your IT resources from internal to external. With external resources, you either get additional value from every hour billed or you find different resources.

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