Understanding Holiday Pay for Your Small Business

At Global Resources, we utilize our experience to help small and medium – size businesses grow and thrive in the rapidly evolving marketplace. 

Our consultants have seen firsthand that the holiday season can bring about confusing payroll administration situations. Handling holiday pay can actually raise some tricky questions. To help eliminate any potential payroll questions you may have at the end of year, we have included information below:

1. In most cases, you are not legally required to provide holiday pay. You are not required to compensate employees for the time they are out of the office on the holidays. As described on the United States Department of Labor website covering holiday pay, the Fair Labor Standards Act stipulates that neither vacation nor holiday pay is federally required; it’s a matter of agreement between the employer and employee. However, employees like receiving holiday pay. In fact, a study by the Society for Human Resource Management (SHRM) indicated that “paid time off” was listed as the 2nd most desirable employer-provided benefit—ahead of 401k and pension contributions and behind only health and medical coverage. Another SHRM study found that the vast majority of employers are making good on employee wishes, as 97% of studied organizations reported providing holiday leave pay to full-time employees.
2. There are some edge cases where employers must provide holiday pay. While companies at large are not legally required to pay holiday wages as a standard practice, there are some situations where it is required of government contractors. For bid work where the McNamara O’Hara Service Contract Act (SCA) or Davis-Bacon and Related Acts (DBRA) apply, one of the stipulations is that employees must receive holiday pay.
3. Many states have said no to holiday pay “takebacks.” It’s wise to check your state payroll laws, as many states have made “use-it-or-lose-it” rules illegal, banning businesses from reneging on previous holiday or vacation pay commitments. In fact, printer manufacturer, LexMark International, recently lost a $13.6 million class action lawsuit after a California appeals court upheld the finding of a lower court that employees were due holiday and vacation back pay. An alternative for employers who no longer wish to pay out on holidays is to cap the ability to accrue holiday or vacation pay moving forward.

To learn more about us and / or to schedule your appointment with the business consultants at Global Resources LLC, call us at 855-338-0266. 

The Different Types of Small Business Manufacturers

Global Resources is a full-service business development group and general management consulting firm that specializes in many industries, including small business manufacturers.    We have seen firsthand that manufacturers in the small business arena are growing faster than larger manufacturers which are often slow to adopt new technologies and new manufacturing methods.  This is partially due to organizations such as the American Small Manufacturers Coalition (ASMC), which exists to promote small manufacturers and to lobby government to assist with legislation and federal programs.

Small manufacturers can offer specialized and personalized products that larger manufacturers cannot make profitably.  In addition, niche manufacturing by small manufacturers allows them to operate in areas that have little or no competition from larger companies. When small businesses are involved in manufacturing, there are a number of manufacturing methods that are employed. These are flexible, continuous, intermittent and custom manufacturing.

1. Flexible Manufacturing - Flexible manufacturing uses equipment that is controlled by a number of Computer Numerical Control (CNC) computers. The production relies more on robotic cells than manufacturing personnel, which allows the business owner to change the products manufactured to react to customer or market needs.
2. Continuous Manufacturing - This process is basically an assembly line that produces a single finished product rather than a number of products or products made specifically for a customer order. The assembly line can be made up of a number of workstations or work centers where individual operations are made on the product as it passes along the line. This manufacturing method is ideal for small businesses that do not manufacture items that are customizable. This allows every finished good that is produced to be sold to any customer without modification.
3. Intermittent Manufacturing - If a small business is going to manufacturer products that are of a similar type, they can adopt an intermittent manufacturing method. Businesses that manufacture items that are similar in nature, but have variations, are suitable for intermittent manufacturing. For example, a company that only manufactures tires for cars will sell tires that are of different sizes to fit a variety of cars. Businesses will manufacture batches of the same product depending on demand and then will manufacture a batch of the same or another product. This type of manufacturing is good for products, which are based on fluctuating demand.
4. Custom Manufacturing - This particular method is used by a large number of small businesses. This method allows business owners to fully customize their finished product to the requirements of the customer. Many items can only be manufactured in this method due to their complexity or the skills required in manufacture cannot be replicated by a machine. Small business owners that work alone often specialize in items that are made using custom manufacturing.

To learn more about us and / or to schedule your appointment with the business consultants at Global Resources LLC, call us at 855-338-0266.