Business managers (such as property managers) earning less than $47,476 will no longer qualify for a salary, and must be paid on an hourly rate, and receive overtime pay for working past 40 hours per week. Property management costs are rising for the property management business. Property managers often work long hours filling vacancies, handling maintenance issues, and serving the needs of tenants and property owners.
The U.S. Department of Labor is changing the regulations for white collar exemptions under the Fair Labor Standards Act, and significantly increasing the minimum salary level necessary for employees to be properly classified as exempt from overtime pay effective December 1, 2016. The new rule doubles the minimum salary for white collar workers to be exempt from overtime pay from $23,660 to $47,476 per year. No exception is made for small businesses.
Meanwhile, cities such as Los Angeles and Seattle, and states including New York and California have passed legislation to raise the minimum wage to $15 per hour. At least one presidential candidate is pressing for a national increase to $15 per hour. Clerical and administrative costs for the property management industry will rise significantly as these increases become law.
The Real Property Management franchise system hopes to mitigate these cost increases by increasing the use of productivity software by adopting innovative ways for showing vacancies to prospective tenants, and sharing best practices among our 280+ offices. These improvements will improve efficiency, yet maintain quality service to our customers.
An unfortunate side effect to wage increases and cost mitigation might be a reduction in employment levels – not just in the property management industry, but across all industries. McDonald’s has already started testing kiosks for ordering food. Similar to an ATM machine, these devices eliminate the need for cashiers by automating the process. Other companies are hiring more part-time workers to replace full-timers, outsourcing activities or jobs, decreasing bonus targets, or increasing prices.
Real Property Management offices, including Citywide RPM in Atlanta, are committed to controlling costs so we can continue to serve our customers well at a reasonable price. For now, and the immediate future, we have been successful. However, as government regulations continue to push wages up, every company in our country will be forced to respond.
Please see our Landlord Calculator, fill out the form below or call Citywide RPM in Atlanta at 678.809.9933. Citywide RPM – Real Property Management is here for you!