The largest expense for funeral home overhead is payroll and employee expenses. Unfortunately, many funeral home owners poorly manage this facet of their business and in doing so not only decrease profit but place themselves in peril for labor lawsuits. Some firms over-staff which puts pressure on margins and others under-staff which places the owner in violation of Department of Labor violations. Speaking of the DOL, we are only weeks away from significant rule changes that have effect on the majority of funeral homes in the United States. Below are three highlight of the changes that take effect December 1st:
- The minimum salary level an employee must earn to qualify for overtime will change from $23,600 to $47,476.
- Highly compensated employees have a new minimum earning level requirement of $134,000
- New mandatory mechanisms to increase levels of compensation will trigger every three years.
What does this mean? Frankly, in many cases it’s going to cost funeral home owners more money to operate their business. This means that the three basic tenets of running a business come into play; raise prices, conduct more calls, or cut costs. Some owners will ignore the regulations (just like the 25% violating the FTC rules) and do nothing. However, if owners choose to operate hoping that a director will not keep his or her notes regarding overtime worked without just compensation, those owners are really placing themselves in a bad position.
I have found in my practice as a funeral and cemetery consultant that many owners think they have covered their bases by having an employee handbook (which has not been updated in years), assigning “exempt” status to employees that don’t qualify, and refusing to get professional advice or council. As I have said many times, I find it interesting that funeral professionals chide families for “buying cheap” or using other services/products than what is offered at their particular funeral home. You know the, “You get what you pay for crowd.” But when it comes to hiring professional experts in subject matter other than funeral, they themselves “cheap out” and regularly fail at the “DIY” method.
Folks, these new Department of Labor changes in overtime status are serious and could have grave (yeah, deadly) consequences for funeral homes if employees are not compensated properly. If you think that having a state inspection is a big deal, try having the federal government on your ass because of an employee complaint. One way or another, funeral home owners are going to have to write checks; when and how much will only be determined based on following the regulations.
From the Command Post (West), Cheers Y’all! #thefuneralcommander