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Inside Wage and Hour Audits: What Every Shop Owner Must Know [E187] - Business By The Numbers

Inside Wage and Hour Audits: What Every Shop Owner Must Know [E187] - Business By The Numbers

Remarkable Results Radio Podcast Sep 11, 2025 38 min
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About this episode

Navigating wage and hour audits can be daunting for shop owners, especially with new labor laws in play. Jamie Hastie from Sesco Management Consultants joins Hunt Demerist to discuss the complexities of overtime regulations, employee classifications, and the importance of accurate record-keeping. They emphasize the risks of non-compliance and the need for proactive audits to avoid costly penalties. With insights on discretionary bonuses and the nuances of different state laws, this episode is a crucial resource for any shop owner looking to protect their business.

Topics: wage and hour compliance overtime regulations employee classifications discretionary bonuses record-keeping audit risks state-specific laws pay plans labor law changes
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This is the Aftermarket Radio Network.
Hello and welcome to another episode of Business by the Numbers.
I'm your host, Hunt Emmeres, CPA, Parmelson Associates.
This week I have a very special episode on a very special guest, but Jamie Hastie, Vice
President with Sesco Management Consultants, is going to join us to answer all of your
questions having to do with the new big, beautiful bill and specifically some overtime
and labor laws.
Sorry I had this figured out or maybe you think everything is going okay.
I think this is an episode every shop owner should listen to.
Before we get into that, I just want to stop and say thank you to you and the rest
of the dedicated listeners.
Remember, if you want to hear your question answered on here or just had a question
for me, shoot me an email at podcastatparmelis.com.
Want to talk to us about accounting and tax services for your shop?
Give us a message at 301-307-5413.
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qualifying, creating job descriptions, scheduling interviews, to negotiating job
offers, Promotive is your answer.
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So just wanted to welcome Jamie Hastie with Sesco here.
Really excited.
I've mentioned this a couple of times on the episode.
Once the new big beautiful bill came out, a lot of you guys had questions about overtime.
What is this changing?
What do I need to do now and freaking out?
Like I said before, I'm not sure that there's this much cause for panic or really this much
stuff has changed, but I'm not an expert on these things.
So I brought on the experts.
So Jamie just wanted to thank you for coming on here.
Hey, good morning, Hunt.
Thank you so much for having me.
That's a lot of pressure that I'm the expert too.
Wow.
All right.
Well, certainly, you know, you're right.
Your clients are panicked a little bit.
My clients on the Sesco side have panicked a little bit as well.
And you know, I kind of tried to simmer everybody, right?
Look, right now there's still a lot to be fleshed out.
But you know, as you and I have talked about the overtime requirement has not changed.
Sure, there may be some changes on the administrative side from the tax filing side.
But even right now, we're still waiting to see that looks like we know that the
secretary will obviously determine what credit they can take.
Again, that's your area of expertise.
I don't touch taxes with a 10 foot poll, right?
But I do payroll and I do wage and hour compliance.
So there is still a lot in motion.
And I think it's fair for employers as well as individual employees to be like, hey, what
does this mean for me?
You know, is there going to be overtime abuse, right?
And then that goes back to other policies, procedures, having processes in place to
manage that appropriately to make sure that the overtime is paid correctly.
You and I have worked together for quite a few years in a variety of areas.
But I've said it before and I'll say it again because I get calls on it every
single week, especially from particular industry clients.
Weage and hour compliance is one of your number one financial liabilities,
if not the biggest.
Everybody thinks it's OSHA or discrimination.
And I'm telling you it's wage and hour.
It absolutely is because of the intricacies on hourly rate, regular rate,
commissions, bonuses, deductions, salaried exempt, salaried non-exempt, hourly,
overtime eligible.
It's so complex and different industries have different nuances.
And any small misclassification, even if the intent is really, really good.
And we see that a lot, right?
From our clients are like, gosh.
Intent's like a hundred percent.
It's like all of these people are trying to do the right thing.
And sadly, a lot of them realize the hard way.
Yeah, intent is what, nine tenths of the law.
Yeah.
And they think they're doing the right thing or they think because the
employee doesn't want to be paid hourly.
They like the salary because it's consistent that we can just do it.
And unfortunately, that is not the way state and federal wage and hour
regulations work.
So we run across these really tough scenarios with a lot of clients,
small, independent business owners, all the way to Fortune 100.
I can tell you, Seffco has represented in our 80-some-odd-year history many
a large client nationwide that you're like, wow.
And I can't obviously say the names of who these folks are.
But you're like, wow, you're a billion-dollar company and still
you're not doing it right.
So nobody is safe from the government holding your feet to the
fire and doing things right.
And it's tough and it does.
It adds up.
And even with the best intentions, there can still be a lot of
messed up.
So it's so important to have the right people and have access to
the right people that are experts in the tax and accounting side.
Again, like, I know enough to be dangerous on that side.
That is not my area of expertise.
And that's why we work with Parmila.
So, you know, you partner with the region our experts to make sure
that we're doing it all right.
So a lot of moving parts and, you know, DOL is very fluid.
Yeah, we've got this big, beautiful bill, right?
And a lot is still ebbing and flowing there.
But then you also have the Department of Labor region
our side too.
I mean, I guess it's just the biggest change of like these ever
changing rules.
That's a great point.
You know, regulations will always change, right?
Whether it's on the federal side, the IRS side, Department of
Labor, and I don't want to get into a political conversation.
But that is very dependent upon which administration is in
charge at which point in time.
And so you get one administration that comes in and changes
everything, puts, you know, their people on boards and
committees and all of this.
And then, you know, if an administration changes over four
years later or two years later on the state side, that swap
and administration is going to undo everything else.
So it's this constant ebb and flow of regulations and
interpretation.
Well, and also I think creates some pitfalls too, because
when they deliberately changed some of these things, you
know, the previous administration was big on not
classifying people as independent contractors.
It was for a while there looked like the end of
independent contractors at all.
But it was a very, very abused position.
So what we saw a lot before was if someone's getting
an audit, a lot of times they were looking for work or
misclassification.
You made a really good point before and I'm going to give
a quick shout out to Sesco.
So Sesco management consultants, like Jamie said, works
nationwide and has worked with us for probably 15, 20
years, helping our shops in these kind of areas.
We have a unique perspective that we're working with
auto repair shops all across the country.
And what comes up on this stuff is the subtleties.
Like I forget what I emailed you guys the other day.
Probably California.
That's the one that always scares me.
But essentially something along the lines of my
client's trying to do the right thing here.
But she's a little bit concerned.
I think it was her employee did not want to take a
lunch break and does that qualify for overtime?
Does that qualify for any sort of issues?
And I was like, the employee willingly wants to skip
their lunch break.
You're okay with it.
They're okay with it.
And I said, you're in California though.
I'm going to really call in the experts on this.
And sure enough, we found out that in fact,
that was not legal and that the person had to force
that sometimes people are looking for certainties of
you can do this.
You can't do that.
But there's a lot of gray areas.
So in a gray area, what is your stance?
Like, do you just say you need to pay overtime?
You need to get more research.
Is there ever anyone that's going to be penalized
for overcompensating someone or what?
Yeah. So it's interesting when you get into these
wage and hour audits and trust me,
I mean, I have done hundreds, hundreds,
if not thousands in my 20 years at Cisco
and to your point, state specific regulations
also come into play.
So when you talk about audits,
typically that's going to be on the federal wage
and hour site, right?
And there are a variety of ways you can get one.
They definitely do pending regulation changes
or enforcement areas.
And that's again, tied into which administration
and they typically rotate around healthcare,
automotive, hospitality.
Why? Because there are so many areas
of opportunity for slip ups
and it's easy money to enforce non-compliance.
So typically you're going to get an audit from the federal.
Now, that does not mean that Virginia,
North Carolina, Texas, New York, Illinois,
I'm doing a ton of workout in Illinois too,
that on that state level
that they can't audit you as well.
They absolutely can.
But generally speaking,
you're going to get it from federal.
So when somebody calls into Cisco with a situation
and we advise on it on a daily basis,
hey, I've got this position.
Actually, and we're talking about the automotive service shops.
In the last two weeks,
I have gotten no less than 10 different calls,
both from owners as well as other association
like industry coaches or association execs
that we work with,
because we do work with a variety
of automotive service national associations
and state associations as well.
I was having this conversation,
I mean, I probably spent across three different days,
four hours with one particular individual
about overpayments.
You mentioned overpayments
and this particular employee
was transitioning out of the organization,
come to find out he had actually been overpaid
in commissions that had worked overtime.
They had a misclassified.
And so I had to kind of walk him through the owner,
how that looks from an audit perspective, right?
So when overpayments do occur,
if we're talking about from a wage an hour audit,
all they are looking at is,
did they meet minimum wage?
And were they classified correctly as exempt, non-exempt?
Independent contractors will get there.
Let's put that in the parking lot
because that's a whole different conversation, right?
We're not gonna open that can up.
Don't do that for your technicians, we're moving on.
There's a way to legally do it,
but it probably doesn't apply to you
as my short answer for most people.
Just don't do it, right?
Moral of the story.
Anyway, so we were talking about overpayments
and I was like, look, they're only looking at minimum wage.
Overtime is based off of regular rate of pay,
not your hourly rate of pay.
And that's a hard concept for people
that don't speak wage an hour language
kind of wrap their head around.
Well, what do you mean, regularly?
I'm like, regular rate.
So if you pay somebody hourly and overtime,
but then you give them a bonus or a commission,
which a lot within this industry does.
Even if they're salaried non-exempt
and they're getting a bonus or commission,
basically regular rate is total money's earned
divided by total clock hours.
So hypothetically, if you're paying me $20 an hour,
but you're tossing me $1,000 a week,
that in essence increases what my hourly rate of pay is.
So my regular rate is maybe more like $24 an hour
and not $20 an hour.
Overtime is calculated on regular rate of pay.
So that's like a huge issue right there.
Let's circle back on that one
because when you and I did the talk live at the VA,
this is when everyone's,
you could see their eyes calculating.
Do you're in headlights, right?
They're like, what?
Yeah, and they're like, I'm in trouble.
So here's the general idea guys is
when you're calculating overtime,
you can't just look at their hourly rate
times one and a half.
If you don't pay any commissions,
you don't pay any bonuses, then fine.
But again, like you said,
it's very, very infrequent for auto repair,
even if it's only a small amount.
But if that guy works 60 hours that week
and his check is $6,000,
more or less he is getting paid $100 an hour
and that's his rate.
Now that has overtime a little bit complicated on there.
But guys, like if you have their pay
as hourly rate, half of that is commission,
that all goes into this.
You can't try to game it.
It's essentially what we're saying here is nice try.
You're calling it something else.
This is all going into their wages.
Jamie, there is, if I'm a shop owner
and I'm giving these guys,
if I had set terms on how they meet these bonuses
or commissions, I'm paying it weekly.
I know I got to pay it.
But if I'm a shop out there and I'm like,
I randomly give these guys some money
or holidays or birthdays,
is that the same rules for overtime or no?
Yeah, so that's a great point.
You bring up what we call discretionary
versus non-discretionary bonuses.
Commission, whatever you want to call it,
it doesn't matter.
And people, again, sometimes our shop owners are like,
well, but it's a bonus.
I'm like, but it's also a commission.
Let's not play on words here.
There is a distinction in federal regulation
regarding discretionary bonuses.
So if it's a random holiday and I'm like,
you know what, I'm feeling generous today.
I'm going to toss you 100 bucks.
But it's not something that is tied to production,
attendance, safety, me hitting some sort of metric
where I know based off of my pay plan,
that's a whole nother conversation as well.
We should have pay plans outlining
how people earn their bonuses or commissions
and how that's calculated and all that beautiful.
They're like, Jamie, I'm not even paying overtime, right?
So we're going to take the first step here.
Yeah, I know.
Anyway, so if it's not expected,
there is no rhyme or reason to it.
Then sure, we can call it discretionary
and that is not subject to the overtime.
Where that does get a little bit of a gray area.
And I want to go back to one of your statements
or questions and you're like, how do you advise?
Do you dig into it?
Do you ask more questions, research it, whatever?
Part of partnering with a Cisco
or having a resource that is strong
in employment regulation is that consultant,
that attorney, whoever it is that you're working with
is going to continue to probe.
So let's say, you're telling me,
oh, I give a holiday bonus.
Okay, great.
How many years have you given that holiday bonus?
What is the bonus amount?
Is it consistent across individuals?
Have they grown to expect that holiday bonus?
Because now there might be a potential where
that employee could argue to the Department of Labor.
Well, yes, we're saying it's discretionary.
Is that our discretion?
We can take it away.
We can change the amount.
We can do whatever.
But for the last 10 years,
it's been $100 on Christmas every single day.
We do now or might try to say,
you've now transitioned that into nondiscretionary
because of the precedent set.
So there are weird situations
and we have those conversations
with our clients every single day
and you've got to always weigh
what the liability is, right?
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You mentioned something about having this in writing.
If that is my shop and I say I know,
but they are all on an employment contract,
they all have a written pay plan,
and in the pay plan, we both agreed
that any sort of bonuses that are paid in December
are discretionary based on if I have a good year or not.
If that lingo is in there, that that is discretionary,
would that help them in a case
or would they still have the argument
of like you're calling it discretionary in here,
but you've paid it for the last five years?
Great question.
Obviously, my argument back,
and I would have to pull case law to support it
and to refute DOL's stance on it's non-discretionary
is the pay plan prevails, right?
We've mutually agreed this Christmas,
this December, whatever is discretionary,
not subject to any sort of overtime liability.
But absolutely, I have differences of opinion
with wage and hour investigators all of the time.
That's why Cisco has been in business for over eight years
because we go toe-to-toe.
I successfully argue aspects
with DOL field operations handbook,
with case law, with other things
that helps negate that financial liability
that backwage liquidated damages liability.
Have they ever been audited before?
Was it brought up in previous audits?
If not, I'm going to argue the good faith effort.
So there's a lot of ways that we can present our case
for lack of a better phrase.
A lot of that is really determining upon
that field investigator, what their supervisor
up their chain of command is really gonna dig into.
I've had some really, really amazing relationships
with regional wage and hour offices nationwide.
Heck, you get the same investigator
for four cases back to back
and they're like, good to talk to you, Jamie, again.
Nice to see you.
And I'm like, yeah, that's great.
And then you have others that are very just
unagreeable, very rigid.
You just never know.
And different regions also really focus on other things.
So when you get that audit,
are they supposed to be looking at all compliance areas?
Yeah, but sometimes they're going in
and they're only looking at one particular thing.
They know they could nail down all unmailed periods
or other things and they're not gonna touch it.
So they all have their little focus areas.
And you know this as well as I do,
the automotive independent shops have one
of the largest financial liabilities
and largest aspect of non-compliance.
I don't care what state you're in because of the pay plans.
I'll add an asterisk to that too,
is these is the largest amount of people
that are not in compliance and have no idea.
Yeah.
There's play of other industries
that are deliberately saying,
we don't pay overtime, I don't do any of that stuff.
And they know where they stand.
They know that if DOL or OSHA comes in,
they're in trouble.
But like you said, the bad part about it
is a lot of the people that we're talking about
are saying, bring them in, right?
Check it out.
I pay my people, I pay them well.
I pay them fairly.
And a lot of these people are shockingly,
you know, getting a six-figure penalty.
I have had a couple of people get put out of business
from labor lawsuits.
Yeah, we had a client, we did a huge, I didn't,
but Bill Ford at our office did a very, very large
investigation up in New York actually
with an automotive service shop, multiple locations.
We got called in after the fact,
tried to argue it down, but it was millions, millions.
And back wage liability in New York has their own
state regulations, so they imputed other things.
As you know, it closed them down.
They shut down.
That also doesn't wipe out your financial responsibility
to pay the back wages.
So, you know, I wanna go back very quickly,
if we can, if you'll entertain me for a second
on that client that I was talking about
that called where he had overpaid commissions.
This employee was complaining about working overtime,
not being paid overtime, but we did a quick audit.
We talked through, and throughout that conversation
I was talking about, well, you can take the credit.
So, you basically have overpaid.
We can apply that credit to the back wage liability
for the overtime, and it was de minimis,
but basically I was like, look, good faith,
I've already overpaid, don't try to recoup $1,000.
Like, why are you gonna do that?
And that owner was terrified of getting a wage
in our audit.
So, we talked through all of that,
but then that led to 500 other million questions,
rightfully so, on service advisors
and managers on salary.
And this was not a multi-location robot.
They had maybe 15 total employees,
active owner, day in and day out.
And, you know, his particular background
came from an automotive dealership.
And, you know, 20 years, and he said,
well, my service advisors are exempt from overtime.
I said, time out, time out.
They are in a car dealership, absolutely,
because they have different exemptions
from overtime for their industry.
You cannot use that.
So, then we had to go into a partial retail 7-i,
which is, you know, salary plus and percentages
and all of these things.
And like I said, I spent probably four hours
of the course of multiple days kind of walking through.
None of his people were keeping time cards.
And I said, fix that immediately.
It's their worth, it's yours.
He did have pay plans.
And real quick on that,
everyone should be keeping time cards period, right?
Yes.
Federal law says everybody must maintain
a true and accurate time card.
True and accurate is not Monday eight hours,
Tuesday eight hours.
I want to see in, out, breaks.
Then you got to look at how long the break was,
if you're, you know,
because certain things under 25 minutes,
technically 30, but DOL will give you the five.
It has to be, you know,
compensable time back, all these things.
There are obviously, you know,
opportunities for somebody that is truly
a salaried white color exempt employee
to not have to keep a time card.
But you're perfectly fine
making everybody keep a time card.
That's great for workers' content purposes too.
So, you know, who is there, when and where.
It's great for a lot of purposes.
I've seen, like, cause the reason I made you repeat that
is I've probably had, you know,
four recent cases on this.
Two of them were fine
because they had the time cards,
because a lot of this is you're guilty
until you prove yourself innocent,
just like sales tax.
So they said, whoa, whoa, you know,
and all four of these I believe
were actually independent lawsuits,
not even the state.
These are just lawyers that get hired to do this stuff.
Tips, I don't know how they do this.
But two of them were able to say very quickly,
hey, time out, Jamie did not work this many hours.
Here's the time cards, we're good to go.
And these people, just as fast they came in, disappear.
The other two people, as soon as they found out
that they don't have time cards,
they know that they're gonna win in court
because now they have their client disgruntled ex-employee,
they have a lawsuit against this person
that cannot prove that they actually paid overtime
or didn't work it, you know,
and they lose almost every single case.
They do.
And we have to remember,
so I work here in Virginia, that's where my office is,
and we have a ton of clients.
You work obviously a lot with VAA as well,
but there are other states.
So you have to remember too,
certain states allow for you to circumvent state
or federal DOL and go straight into civil litigation.
And you're right,
whether it is a federal agency or an independent attorney
that is coming after you from civil litigation,
the only thing that you have to defend yourself
is your record keeping.
I don't care whether that's Title VII, EEOC,
wage an hour, you name it,
that paper trail is so, so critical
to argue your defense
because it is their word against ours
unless we can prove otherwise.
It's so important, Hunt.
And I'm glad that you brought that up
because you probably see it
whether that's the state sales tax or not.
One of the things that you mentioned,
I was actually surprised to hear
and I'm out of my own curiosity
is when I see this, like you said,
a lot of these states,
it's the states contacting my clients.
Some of these states, it's private attorneys.
And as you might imagine,
the private attorneys are generally
a lot more aggressive and a lot worse.
Because you mentioned before,
some states don't allow this,
like California's, I always joke,
at any point I have five clients
getting sued in California for something,
but there's other states, I don't see it.
In some states, can you not actually go
hire an attorney directly?
You have to go through the state or what?
Yeah, so there are some states that require
any wage an hour issues to be filed
with the state or the federal government.
Virginia used to be,
I'm gonna use Virginia for an example.
So up until, so we're in 25,
up until 21,
2021, they added the provision
which allows for civil litigation.
That makes sense on the timing
from what I've seen personally.
Yeah, Virginia is a big one for employment lawsuits.
So there are some states where,
their state regulation allows
for civil litigation for those things
and others that don't have that regulation in place.
So your only opportunity is to go
through the state department of labor
or through the federal wage an hour division.
But the thing about it guys to think about here
is the state, you can say
that they have different incentives here.
There is a large incentive,
the dealerships very rarely get looked into
on this stuff, independent of large amount.
Like Jamie says, there's different laws, right?
So there's politics at play.
But if you look at someone like a lawyer,
they do not care about the automotive industry
but what they've realized is
there's very good return on their investment.
So if they've zeroed into this
and they've zeroed into this industry
and you guys to look at it,
should that make you concerned?
And a lot of this comes back to your documentation.
And I think that I'm gonna know the answer to your question
but when we're talking about overtime
and if I'm sitting here after listening to this episode,
do we want to be aggressive here
and start to recategorize our people
so they can get a little bit of credit on the tax return?
Or is that something that if they try
and get aggressive there,
open up yourself to a ton of different issues?
Here's what I think.
Payroll is our number one controllable cost.
Is overtime to be worked?
You need to make sure that number one,
the business justifies it,
that the time records are accurate,
that your payroll systems are set up appropriately.
Even if you have somebody on salary,
that does not necessarily mean
that they are exempt from overtime.
If you're paying certain people flat rate,
that's a whole different conversation.
I mean, most of the technicians are hourly.
There are some shops that obviously structure it
like a dealership to remain competitive
by paying a flat rate turned hour
that is a commissioned pay plan.
But then we have to dig in and look at,
are they hitting one and a half times state minimal wage
for every clock hour that they work?
If they're not, then you got a bonus amount.
And if you don't want a bonus amount,
they're subject to overtime.
So you've got to have the appropriate systems in place.
So do I think that there might be some opportunity
where people are maybe trying to work additional overtime
because I'm thinking, hey, as an individual,
now I can get a credit in 2026 with my tax returns
or hey, maybe even the service shop owner is like, great.
There might be some incentive there for me.
Of course, there's always area for misuse
in any regulation.
There's always loopholes that people will find.
That's the glory of regulation as a whole.
But I think it goes back to having solid policies,
procedures, having a good audit.
If you have not partnered with somebody to do a true wage
and hour audit, especially in this industry,
you're doing a huge disservice to yourself.
There are really, really important things
that we look at, we dig into.
We have conversations just like I had
with that example at the client
that I was speaking with where he's like,
I didn't know I had to keep time cards.
I didn't know I had to do this.
Why isn't anybody telling us this?
I said, Hunt and I have been talking about this
with the VAA for how many years in a row?
We talk about it at least on an annual basis.
He's like, I had no idea.
There's a lot there, but you have to be proactive
because when we are reactive, which it happens, right?
I mean, a lot of times we get called in to represent
or to look at something on the backend
and then I try to work my magic.
And I have, I have successfully argued a lot of stuff down
from hundreds of thousands down to 50,000 or whatever.
There are tips and tricks we can do there,
but your systems have to be in place.
You should have a good employee handbook
that has a policy.
Nobody works overtime unless it is approved
by the manager and you've got
to hold people accountable for that,
but your payroll has to be set up correctly.
So if you've got somebody hourly plus overtime
and that overtime premium is not being calculated
because you're using QuickBooks or Paylocity
or all of these other payroll systems.
Any of them not set up correctly, right?
And you have no idea what I'm saying
when I say overtime premium, you need an audit
and we need to have a conversation
because those things add up.
So let's be proactive.
Let's use this big, beautiful bill as an opportunity
and a reminder that while, yes,
there may be some tax credits for future year tax filings
for an individual basis.
This is the employer responsibility
that nothing in the big, beautiful bill changes
that you're still required to pay overtime
to your people if they work it.
If they are working on authorized overtime,
that is a performance management issue
and not, well, I'm just not gonna pay it.
That's gonna open you up to some liability as well.
And you make a bunch of really good points there, right?
Where it's like, hey, you want the good news
or the bad news is, the good news is,
is your employees might be getting this credit
for overtime and saving a couple bucks on taxes.
But the bad news is, is you only uncovered that
when you actually audited how you're paying people
and realized that you should have been paying overtime
for a long time.
I cannot stress this enough, guys,
like there is times when I see this,
a client asks me or something so egregious
on the financials that I reach out to Jamie
and her team and say, there is something going on.
But I don't really see how you guys do pay plans.
I don't ever see your time cards
or see that you guys are not doing it.
I don't know that you guys have an off-the-books agreement
with one of your team members.
And the way that I kind of explained the relationship
is very similar to my clients
and as it goes for deductions.
There are people that want to be black and white.
There are some people that do not care about that line.
But it's my client, my responsibility,
my client to educate them where they stand.
There is the same issues with employment.
There is a lot of gray areas.
There's a lot of things
you're trying to do right by yourself and the team members.
And again, you might choose to still have that position,
but wouldn't you like to know?
I'm in a little bit precarious position
or just like when taxes,
if you are actually proactive to this like Jamie says
and do a little bit of paperwork,
that precarious position becomes rock solid
because it's been documented and agreed upon.
If you guys are listening to this episode
hoping to get a tax credit,
you have left with maybe a tongue lashing
of you need to take a look at how you're doing this stuff.
And the best way to do that
is to reach out to Jamie and Sesco.
We love them.
They've done right by us.
They've done right by every single client
I've ever sent over there.
If someone is sitting here right now and saying,
I don't even know what a handbook is,
what are we even talking about?
What's the best way for them
to kind of reach out and get some information?
Yeah, absolutely.
So happy to reach out to me or reach out to corporate.
You can go to our website, www.sesco-mgt.com
or call the corporate office at 423-764-4127.
Again, we have clients that we work nationwide,
all industries, but very, very specifically,
especially in the automotive industry.
And let's have a conversation.
There are a ton of options that we can explore
in terms of how to get you a handbook or an audit
or you want to chat for a few minutes.
We can absolutely look at all of that.
And like I said, we've been in business since eight years.
We were actually founded by a former wage and hour
investigator back in 1945.
Right after minimum wage,
the Fair Labor Standards Act came into play.
So we live it, we breathe it, we deal with it every day
and it's so, so important.
And we really appreciate,
you're very kind to say
we've always taken care of your folks
and we pride ourselves on that, right?
We wouldn't be in business as long as we have been
if we didn't have a great reputation.
So we love our partnership with you.
I enjoy working with you personally
and I love helping clients.
Sometimes I'm not always the favorite person
because just like you might not be at times
where you kind of have to tell them,
well, here are your options
and how much risk are you willing to assume
with these options?
But here's what I suggest.
It's still rewarding to know that at the end of the day,
we're helping these business owners be successful
and to do things the right way
and to continue their business
and get back into their communities
and within their industry.
So it's rewarding.
Yeah.
And the thing about it is this is not something
that is hundreds of thousands of dollars.
This is not something where we're paying Cisco five grand
to audit this for the next 20 years.
A lot of this is you gotta spend
some decent money up front
to make sure that you're right on this
and you gotta make sure
you got the proper oversight.
But the worst thing that you can do
is I have clients that are paying ADP $1,000 a month for HR.
Then what you have is you have like the semblance of HR.
You have, it looks like you have an employee handbook
but the only thing worse than having no employee handbook
is having one that you don't know what's written in there
because again, I've seen this come back and bite people.
Oh, hey, you don't need to do that.
Well, sure you do.
Cause you was in your handbook.
Well, I didn't know that.
Yeah, cause you let someone else write it
that doesn't know what they're doing
and everyone signed it
and just kind of entered into a legal contract
that you weren't aware of.
Yeah, you gotta be careful
because again, most states are at will.
So a paper plan is not an employment contract.
It's an agreement on, you know,
those paper in that subject to change.
You always have to get it signed,
updated, that sort of thing.
Unless you were dealing with a CEO
or a chief level position,
nobody should have an employment contract, period,
because that contract is gonna prevail.
To your point, Hunt,
with regardless of what is in the handbook,
number one, not having one is a bad deal.
Number two, borrowing one from your body
in a different state
that might be 10 years old, also a bad deal.
Number three, using a generic stock one,
and I have to be careful on how I say this
because there are other PEO services
and other HR quote unquote support services
or a lot of payroll vendors
that are very generic.
They won't give you specific advice.
They don't understand the industry
or the intricacies or there might be, to your point,
something in that policy
that somebody has signed off on
that they didn't know was there
because, well, XYZ support system gave it to me.
So I'm just gonna roll with that.
You're locked in to following that.
There are pros and cons.
It's gotta make sense for their business.
But more importantly, as a business owner,
you have to have a say
in policy procedure processes
that make sense for your business
while also still complying
with state and federal regulation.
I love it.
Well, I appreciate it, Jamie.
We got everyone scared,
but I think everyone learns something from here.
And then again, like this is something
where you just started your shop last year
and you've never done this before.
And this is also hopefully a wake up call
that people that are third, fourth generation
doing this for a long time.
If you have not been audited in the last five years,
then you need to get yourself audited by a professional
because I haven't seen very many recently
where the state has walked away empty handed.
If they are continuing to look into this industry,
they're keep on coming back.
Do you think that they're having good luck
with your competitors out there?
Appreciate it, Jamie.
Get ahold of Jamie.
I'll put all of your contact information
that you listed before in the show notes.
Yeah, and appreciate it.
Thank you so much, Hunt.
It's been a pleasure.
I hope you enjoyed that conversation
with Jamie just as much as I did.
And like always, when Jamie and I talk,
I'd learn a ton and also get a little bit nervous.
I hope that you don't let that nervousness
or some of that concern go to waste.
Ensure that you're doing this stuff correctly.
Ensure that you are not leaving yourself
with possible liability that you aren't even aware of.
As always, please share with friends.
If you have any questions, comments,
or ideas for a future episode,
shoot me an email at podcast.parmellis.com.
Don't forget to check out the rest of the shows
on the Aftermarket Radio Network.
You can find all of these on your favorite podcast listening
apps on the aftermarketradionetwork.com.
Thanks again for joining me on Business by the Numbers.
Stay safe out there, and I'll talk to you all next week.
You've been listening to Business by the Numbers
with Hunt Demerist on the Aftermarket Radio Network.
Follow Hunt on your favorite podcast listening app.
Let him know what you'd like him to cover.
His email is in the show notes.
Hunt is all for advancing the aftermarket.

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