ladyfoxfyre, I encourage you to read this carefully. It’s an excellent summary of what you are missing about the benefits of salaried workers.
I have read it. And yes, I am salaried in the US. And again, you’ve given me a bunch of reasons why salary is good without mentioning specifically the need for exempt status, considering that many salaried positions are non-exempt. These non-exempt salaried positions have all the same benefits you’re mentioning, comp time, flexibility, etc. but they only specifically differ when you’re working beyond your base hours and not compensating anywhere else for it. I assure you there are many employers for whom this is an expectation. Just because you can imagine a scenario in which it is not expected doesn’t mean that it is not pervasive elsewhere.
I can accept that there are positions where this is transparent and the expectation going into the position and that person is rewarded with an appropriately high salary in exchange for the expectation of long work weeks. In my experience, there are just as many positions where that expectation is not revealed beforehand but rather in the corporate culture, which benefits the employer substantially.
Salaried and exempt do not always go hand in hand, which is why I keep saying that you’re not providing examples of why exempt status is beneficial for employees when you provide examples of why being salaried is beneficial for employees. That’s why I feel we are talking past each other.
The issue is that being exempt from overtime is a key component of being salaried. If your employer suddenly has to treat you like an hourly employee in ways that are negative for them (tracking your time, paying overtime if you work late, etc) then it’s reasonable to expect that they’ll start treating you like an hourly employee in ways that are negative for you (not allowing you to leave early with pay, having flexible hours, etc).
A professional employee is paid a rate to get the job done. It might mean working a weekend here and there when needed. It might mean jumping on a conference call with India at off hours. If you want extra pay for these things you should negotiate it in your salary when you start. If you want to be compensated exactly for the hours that you work you should be a contractor, since that’s how they get paid.
Most people don’t want this and that’s why salaried positions are desired by most employees. Would most employees like overtime pay when they work late? Sure, but they realize that’s not going to happen because they are salaried and it doesn’t work that way. But the benefits far outweigh the negatives.
There’s another piece that you are missing. Where will this extra money come from for the overtime pay you suggest employers should be giving people? This will translate into less new hires since there is less payroll money available. We’d end up with higher employment, like you see in France and other countries.
Eventually, things would stabilize with employers baking in the cost of overtime with the salaries they offer. It would be a tough adjustment for companies who offer higher salaries in exchange for long hours. They’d probably have to use attrition and layoffs to get rid of those employees and replace them with people working for less salary and then pay them overtime.
Basically, companies are only willing to pay what they are willing to pay. You can’t force them by law to pay more for professional employees. It would end up being a tough transition, having higher unemployment, lower salaries and people would probably be paid about the same in the end.
You seem to be assuming that salaried employees frequently get to go home with pay if there’s nothing for them to do, or can work whenever they like. Those people are a tiny, tiny minority.
No, of course they don't get to work whenever they like, or frequently get to go home with pay if there's nothing for them to do. That only happens in a very few jobs. But I've never known anyone salaried (outside of govt work) who had to use two hours of vacation or stay two hours late the next day or got docked pay because they left two hours early for a doctor appointment. My son works in a retail store. They close at 9 and generally finish clean up at 10:30 or so . If it was a slow day and they actually walk out at 9:30, he only gets paid until 9:30 and loses an hour's pay. Whe my husband was a salaried, exempt ,retail manager and they walked out an hour earlier than usual he got the same pay with no need to use vacation time or make it up the next day or week. If it happened every day for five days he got the same pay. My son, being hourly, would lose almost a whole shift's pay if he got done an hour early for five days.
And salaried is nearly always going to go along with exempt - because if your employer has to track your time and pay you overtime, that employer is going to cut your pay when you leave at 9:30 instead of 10:30. In fact, I would argue that "salaried ,non-exempt jobs" do not exist. If you receive overtime pay, you are being paid hourly. Perhaps you're being paid some mininum number of hours even if you actually work less (some jobs pay you for 40 hours, but only expect 35 hours of work) and maybe it's OK to quote a yearly salary ( because in lots of jobs, overtime basically doesn't exist) but you are actually being paid hourly.
They certainly exist. Pharmacists are one example. You’re being paid a salary in exchange for an expected number of hours per week, even if you don’t submit a time card.
If the number of actual hours exceeds the expected number, they divide your salary to find out your hourly rate and pay you that rate in overtime. Just because you can calculate what a salaried position would pay per hour doesn’t mean that they’re all suddenly hourly.
And anyway, I thought the benefit of salary was that they don’t dock your pay if you work under your base hours? You are now saying that if they have to pay you overtime then they’re going to suddenly start shorting you for hours not worked.
There are many compensation models here in the US. Hourly, salaried, salaried with OT. contracted hourly, base plus commission, bonuses, so on and so forth.
For example, I work as a contractor project manager. I get paid on an hourly basis. But I also work a minimum 40 hours a week. Even if I sit there staring out the window at the Brooklyn Bridge all day, I still get paid 8 hours. The downside is that when my specific project ends, so does my employment.
When I worked in management consulting, I got paid a flat salary. Although one firm I worked for paid what was effectively an OT bonus. There was a complex calculation over the entire quarter, but basically you got compensated for the extra time your worked. There was also a performance based bonus at the end of the year. Decent enough, but not like investment bankers making 100% of their base salary.
Some salespeople might earn a low base but be expected to do very well in commissions.
In the US, we generally expect that professionals and managers earn a flat salary because they get paid more, have more freedom in how they spend their work time, have more upward mobility in their careers and aren’t spending their day clockwatching so they can jet out at 5. Hourly employees, unless they are professionals paid on an hourly basis, tend to be lower level, less educated or more blue collar. It is assumed that if they aren’t told exactly where to be, when to take breaks, and what exactly to work on, they will slack off or simply not know what to do. Or they will pedantically claim they didn’t know they shouldn’t take 45 minute bathroom breaks.
Professionals are assumed to care about their long term career while the hourlies are assumed to be there just to collect a paycheck.
How can they pay you overtime if you don’t report your hours in some way?
If your employer is required to pay you for overtime, they are free to pay you only for the hours you work , and nearly all non-exempt jobs, even highly paid ones do just that Your particular employer may not do so, and it may not be common in your industry or your area to do so, but there is no legal reason under Federal law ( or probably any state law either) why any job cannot be paid on an hourly basis. There are only legal requirements to classify a job as overtime-exempt.
See here for a reference to pharmacists paid on an hourly basis ( so they clearly exist) and a court ruling that “the pharmacist was paid on a salary basis and the employer’s practice of paying the “premium pay” calculated on an hourly basis did not destroy the exemption from the overtime provisions of the federal statute.”
No. I’m not assuming that at all.
doreen’s post does a good job addressing this and I agree with it.
Is the subject of the French still on the table?
I think Debaser is still busy arguing that you cannot be a surrender-monkey if you are happy being a surrender-monkey, or *should *be happy, or it’s a choice being one, or something…