Jeff@EvolutionBusinessAdvisors.comSome firms use compensatory time off to compensate employees for working more than their scheduled hours. For non-exempt employees compensatory time cannot be awarded to the employee in lieu of overtime, even if the employee requests it. The Ohio law is very clear that any time worked in excess of 40 hours in seven consecutive work days must be compensated at overtime rates. Substituting time off in another time period does not comply with the law.

Also be very careful with part time employees who could trigger eligibility for benefits or trip your headcount into the Affordable Care Act mandatory health care rules. Allowing an employee to work more than 30 hours in a week could unintentionally activate these benefits. And you might not realize the error for some time which would compound penalties.

There are tricky areas of compensation law that should be discussed with an employment attorney. For example, are non-exempt employees who take work home eligible to be paid for that time? The answer is yes. Could that same work qualify for overtime- yes. What about the employee who routinely comes in early, putting in more than their scheduled time? The answer is- check with counsel but probably yes. What about flex time employees who stay a little late to complete a project – that time must be compensated, possibly with overtime.

Finally, you cannot presume that other states have the same rules on overtime. For example, California requires overtime any day the employee works more than 8 hours in a day, but they have specific exemptions to the rules.

If you are using this type of compensation practice or considering it, I strongly recommend you speak with an attorney who practices employment law. The penalties and embarrassment to your business is not worth the savings in overtime pay.



Evolution Business Advisors, LLC. is here to assist small and mid-sized businesses achieve their financial goals.  Jeff Matthews, who has provided CFO services to successful businesses since 2012, formed Evolution Business Advisors to support privately held businesses who are in an evolutionary stage.  Whether that evolution is organic growth, financial restructuring, acquisition of a business transition, Jeff has the experience to assist you in strengthening and developing your business.

Visit www.EvolutionBusinessAdvisors.com or reach out directly to Jeff at 513-443-2360 or Jeff@EvolutionBusinessAdvisors.com.

There is no single business metric that is crucial to every business nor every industry.

Most metrics are historical measures of ratios and relationships that the business deems critical to their success. The metrics may be financial but more often are measurements of volume or utilization of employees. In service industries metrics often focus on utilization of the billable personnel and billable hours versus paid hours. Call volumes are common metrics for sales personnel as are quote conversions into actual sales.

One metric that I think is important for all businesses to consider tracking is the projection of cash requirements. The term “Cash is King” is a well worn business statement, but the fact remains that cash is the lubricant that keeps business flowing. If a firm is projecting their cash needs for the next 13 weeks, they can have a reasonable picture of the risks to their cash position. And the projection gives them visibility in time to address and concerns. Without a projection, they are guessing. While experienced owners may be able to make reasonable educated estimates, documenting the thought process involved in the estimate will allow for refinement in the future.

A cash projection starts with an understanding of anticipated cash receipts from sales, receivables, and other sources such as tax refunds. These receipts are matched to anticipated expenditures to show the net cash generation/usage each week. Expenditure categories should be customized to each business. In many businesses payroll and benefits are a category. Payments for inventory purchases, rent, major insurance charges, capital equipment, and large variable costs also make sense to estimate on a weekly basis. Always include a miscellaneous category of expenditures and receipts to capture the unusual large items such as large quarterly or monthly payments. I recommend that a company track their weekly actual performance as a feedback to improve their estimating process.

If you don’t have a cash projection process or are not satisfied with the results you are seeing, I would be happy to meet with you and explore how to improve the process.