By Amy Campbell  

What would you do with a few extra hundred dollars a month? Many self-storage managers will soon find out. Yesterday, the U.S. Department of Labor announced the long-awaited update to its overtime regulations. Before you break out the bubbly, there some things you need to know.

First, the new rule doesn’t go into effect until Dec. 1. This leaves employers some time to get their ducks in a row. The regulations essentially double the salary threshold to reach exempt status for overtime pay. Employees who earn less than $47,476 annually, which is about $913 weekly, will now be eligible for overtime pay. Previously, only employees who earned less than $23,660 a year ($455 a week) qualified. Plus, hourly and salaried employees who earn less than this amount will now be entitled to time-and-a-half pay for every hour they work beyond the standard 40-hour workweek.

This is a big deal all around. Many self-storage managers are already considered “non-exempt” employees and entitled to overtime. With the threshold increasing to $47, 476, more will fall into this category. Some salaried workers, once considered “exempt” from overtime pay, will now be eligible as well.

However, there will be some downsides to employees who aren’t “punching a clock.” Salaried employees and their supervisors will need to closely track hours. Some salaried positions could become hourly ones, which means no more trips to the doctor or long lunches while technically “on the clock.” This can be murky water for storage operators used to having flexible hours. On the positive side, it might force more employees—and their bosses—to reevaluate the life/work balance. Just because you can work 45 hours while a salaried employee, doesn’t always mean you must.

In fact, some employers will find a workaround by simply not allowing staff to work beyond the 40 hours. This could mean hiring a part-time employee or even giving a few more hours to an existing one. Still, I believe many managers will choose to work “off the clock” just to get their job done, regardless if they get paid to do it. Many already are!

Salaried employees might also meet other criteria that will keep them from earning overtime pay. These center on job duties. Overseeing other employees as well as certain job titles put a salaried employee in exempt status. (For more on this, read this Department of Labor fact sheet.)

While this new rule is great for many employees—about 4.2 million, according to the federal government—it could cripple some small-business owners who now must pay overtime to a wider range of employees. In the self-storage industry, determining “hours worked,” particularly for managers who live on site, can be complicated. Plus, this is an industry that relies heavily on bonuses, so owners must determine how to factor them in to the pay equation.

One thing is certain: the successful operation of the storage business must be a priority. Owners have about six months to put a plan in place. A good place to start is by determining which employees will be affected by the new regulations. Next, take a look at those employees’ hours worked, regular and overtime pay, if applicable, and bonuses. Finally, come up with a plan that satisfies everyone and keeps the most important factor front and center: operating a profitable self-storage facility and providing a great work environment. This should always be the focus.

If you’re confused about all this, you’re not alone! Manager compensation has been a hotly debated and misunderstood topic in the storage industry for years. However, as self-storage continues to move toward a “retail-oriented” business—and the manager’s role has greatly been impacted—the salary equation has garnered more attention. More owners today recognize the importance of a good manager in a facility’s continued success and are restructuring their compensation packages so that they’re not only fair but attractive. This is bringing more qualified professionals to the industry.

ISS tackles the subject in the “Self-Storage Manager Compensation 2015: Comprehensive Survey Report Package,” available in the ISS Store. The industry-exclusive package takes a deep dive into the topic and offers insight on everything from base pay to bonuses. It includes two special reports from the editors of ISS. One recaps a survey conducted with industry owners and managers and presents some astounding findings. The other is an in-depth feature article offering interviews with facility managers, district managers, owners and industry experts on the topics of fair wages, benefits, incentives and other forms of compensation.

You can also discuss salaries, bonuses and more with owners and managers on Self-Storage Talk, the industry’s biggest online community, in the thread, “What’s Your Salary.”

What do you think about the new overtime regulations? Post a comment below or on Self-Storage Talk.