Startup Idea: Advanced Employee Salary Management Software

Startup idea to develop a software that manages changes in exempt employee wages. The system would track and adjust bonuses and base salaries to meet legal requirements, analyze the best pay options for an employee, and calculate hourly rates for recategorized employees. It would also incorporate tax calculations and report generation by individual or group.

I work in a staffing company that is currently facing a problem with how to manage the imminent changes in exempt employee wages.

Basically we have a large number of managers who are currently exempt employees and make a base salary of ~32-40K a year.

They also make between 1-3% in bonuses based on the sales at their location. The rules regarding exempt employees requires that they get paid ~47K a year to remain exempt, but (for the first time) allows up to 10% of that salary figure to come from nondiscretionary bonuses.

Right now our company president is looking at just reducing bonus and raising base salaries to ensure we meet the requirement.

I believe it would be less expensive to use a software solution to allow us to make a minimal increase in salaries (say to $821.7/wk or ~ $42728/yr) with the rest being from bonuses.

The key is that our bonuses are paid either monthly or quarterly, but we would have to ensure that when these payments were made the persons average weekly salary has to equal $913 or we have to make a "make up" payment.

This problem is common to many businesses that currently pay bonuses and software that addressed this concern would be valuable.

Features that you might also consider are some sort of comparison tool that would let you examine options to determine the best pay option for an employee ( convert employee to hourly w/overtime , raise pay to meet exempt requirements but lower bonuses, raise pay a little bit and incorporate bonus tracking to make up the allowable portion).

You might include a module that calculates what the hourly rate should be for an exempt employee you are recategorizing as non exempt (ie if they currently work 50 hrs a week and make 37K as an exempt employee - what would they make per hour if they worked 40 hrs at regular pay and 10 hrs at time and a half).

A truly excellent product would calculate all tax requirements too and would allow you to enter as many employees as you have and would generate reports by individual and by "group" to facilitate tax filings.

Note small businesses all over America have been hoping this new rule (scheduled to take effect 1 Dec) would be delayed - congress has acted, states have file lawsuits, but currently it looks like its happening and this makes this need suddenly urgent!