Labor & Budget Management

Labor & Budget Management

• 1.
  Budget and LaborManagement Audrey Rowland, MS MBA www.greenspacetx.com
• 2.
  Objectives • Examine currentbudget challenges • Discuss strategies for controlling cost and forecasting revenue • Review labor laws and compliance • Identify the best practices for successful budgeting
• 3.
  Discussion Do you workfrom an annual budget? What are your biggest budgeting challenges?
• 4.
  Common Mistakes • Notwriting a budget • Not calculating cost of services/tuition • Not planning for unplanned expenses • Not investing in labor
• 5.
  The challenge itto figure out how to run a quality program that parents can afford to use and teachers can afford to work in. Affordability  Accessibility  Quality
• 6.
  Revenue Tuition • Actual costper child • Amount parents in the community can pay • Fees charged by nearby programs • Subsidies • Cost of care in each program
• 7.
  Fixed vs. VariableCosts Fixed: • Administrative salaries • Occupancy costs • Insurance Variable: • Teacher labor • Food • Materials/Supplies
• 8.
  Expenditures Salaries and ClassroomMaterials 50-60% Administrative Cost 12-20% Food 6%-19% Occupancy 10-20% Other (transportation, health, etc) 5-20%
• 9.
  Controllable Costs Calculate perchild • Food • Supplies • Labor Cost Divide average annual salary by the number of children per teacher and double. Ratio 8:1 Average Salary $20,000 Cost per child $5000
• 10.
  Labor • Largest expense •Highest Return on Investment (ROI) • Great teachers retain enrollment
• 11.
  Best Practices • Knowand understand your risks • Overestimate your expenses • Know your enrollment/sales cycle • Plan for large purchases carefully and early • Remember that time is money • Constantly revisit your budget
• 12.
  Labor Law Texas PaydayLaw – Texas Workforce Commission U.S. Department of Labor – US Wage and Hour Division
• 13.
  Exempt vs. Non-Exempt Employeesexempt from minimum wage and overtime benefits. • Job title does not determine status • Administrative or professional • Teachers are exempt if their primary duty is teaching, tutoring, instructing or lecturing in the activity of imparting knowledge, and if they are employed and engaged in this activity as a teacher in an educational establishment.
• 14.
  Learned Professional Exemption Toqualify for the learned professional employee exemption, all of the following tests must be met: • The employee must be compensated at a rate not less than $455 per week • The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment • The advanced knowledge must be in a field of science or learning • The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
• 15.
  Paying for training Youmust pay unless all 4 of the following are met: (1) it occurs outside normal scheduled hours of work (2) it is completely voluntary (3) it is not job-related (unless the employee attends an independent school or college on his/her own initiative outside work hours) (4) no other work is performed during the period. The time spent attending training that is required by the state for day care center licensing is working time for which employees must be compensated.
• 16.
  Paying for Training •Training rate of pay • Flex time • Planning time/nap time • Budget accordingly
• 17.
  Overtime • Employees mustbe paid for all hours worked • Overtime is paid after 40 hours in one work week • Employees must be paid hourly, rather than at a ‘flat-rate’ or salary, unless their position qualifies as exempt
• 18.
  Breaks • Unpaid breaksmust be at least 30 minutes • Unpaid breaks must be taken outside of the work space/classroom • Unpaid breaks should not include any work-related tasks • Required for nursing mothers Short breaks increase productivity, alleviate stress and reduce illness
• 19.
  Reducing Labor Costs •Substitute teachers • Reduce turnover • Invest in training • Improve hiring/onboarding • Creative/Flexible scheduling
• 20.
  Conclusion • Share BestPractices • Questions • Action Plan