I’m not familiar with the legal nuances, but assuming the matter is as unambiguously within the power of the DOL as this article suggests, then I think I’m in favor of this (though I think it should be probably have been increased incrementally or indexed to inflation rather than rare but massive changes which can have significant though unanticipated consequences).
In general, ISTM that a lot of employers play games with the “supervisor” designation, and this policy change looks to put a stop to that.
I do suspect, though, that one result will be to push down the hourly rate of those middle-income newly overtime-eligible people. But if that happens, then they’ll just be back where they started. Meanwhile, ISTM that these changes are more aligned with the spirit of the law than the current situation.
The DOL has generally rejected indexing the salary baselines to inflation because they believe that wages in some industries aren’t especially tied to inflation. They fear that this will cause the threshold to rise either too quickly or too slowly depending on the economic circumstances, especially in vulnerable sectors like Southern agriculture and retail. So they prefer to do it piecemeal based on evidence of actual wages. There is also a fear that indexing it to inflation will cause a tremendous amount of inertia (in part because they’ll no longer have the good argument that it needs to be updated from time-to-time), and fear that it will make future corrections harder to accomplish.
I don’t know if I’m persuaded by either of those reasons, but it’s worth knowing that it is a considered and deliberate approach since at least the Bush Administration, and probably earlier.
Isn’t the entire point of putting someone on salary that you pay them the same no matter how many hours they work? Trying to have it both ways never works.
No. An employee’s entitlement to overtime pay doesn’t depend on whether he is a salaried or hourly worker. It depends on whether they are defined as exempt or non-exempt under the Fair Labor Standards Act and DOL regulations. An exempt employee must be salaried, but in truth, very few employees are true salaried workers. If I don’t show up for work tomorrow, my pay will be docked even if there is nothing for me to do.
Boy, reading over the requirements for exemption is pretty striking- the requirements are so broad that I’m surprised we’re not all exempt.
I’d certainly like to see exemption strictly enforced- as I’m currently in month four of mandatory overtime at my new job, and apparently I can expect this every year.
You mean narrow. The exempt employees are the ones who don’t get overtime. In theory, very few employees are exempt. In practice, employers tend to classify as many people as exempt as they can possibly get away with. The FLSA hasn’t been substantially updated (other than the salary numbers and the addition of the computer exemption) since the 1930s.
First, I think the DOL needs to get serious about the job duties exemptions in the first place. The managerial/supervisor exemption is seriously abused. How many people are exempt from overtime and yet still need approval from someone higher up to handle most customer complaints? The original language of the law doesn’t give a blanket exemption to everyone with supervisory duties, only those with substantial decision-making power. McManagers and secretaries are not exempt at any salary.
Second, on a more personal note, the salary component of this is going to seriously screw up the arrangement I have with my office manager. Our business is somewhat seasonal, so 4 months of 60-hr weeks are meant to average out with 8 months of 32-hr weeks. (Ignoring paid time off, that’s 2,140 annual hours when 40-hr weeks would be 2,080.) As long as she’s exempt, I can pay her a flat salary all year long, and she can even work from home because I don’t care how many hours are involved if the work gets done.
If the new proposal goes into effect, she’ll either get a massive raise (for which there is no money), or she’ll have earned half of her annual salary by April and have some serious budgeting to do for the rest of the year.
While this is exactly how my personal finances work, I know that most employees don’t want to operate that way. (Hell, just propose a single monthly paycheck to most people and see their responses. They can’t even save up and budget for two weeks, let alone eight months.)
I’m another employee who falls into this category. I work out at remote locations for usually a few weeks here and there, but then I get a few weeks off. Paying us hourly doesn’t work because when we are working, we’re usually working 12 hours a day 7 days a week, so we’d have more overtime than regular time. Paying us exclusively salary doesn’t really work either because the vagaries of the schedule affect how many days we actually work-- last year I worked a bit over 100 days but in earlier years I’ve done closer to 200.
The arrangement we’re under now is they pay me the $24k salary to make me exempt and then I get paid a per-day rate (which is most of my income.) If they moved the limit up to $52k I’m not sure what they’d do. Maybe cut the day rate to near-nothing and (worryingly to me) make us work more days.
I know there are some companies that do similar work that pay hourly, but the way they do that is giving their employees a small nominal hourly rate with the understanding that it’ll work out to much more after all the overtime. The only problem with that is that if you do get a pay period where, say, you only work 3 day you don’t get overtime and you get kinda screwed. Making workers into fig-leaf independent contractors also used to be very common, but that is being cracked down on.
I do definitely agree with trying to get the letter of the overtime laws more in line with the original spirit, but the problem is that, yes, like the OP said in the last paragraph the employers will just fiddle around with the pay structure to make it so they are paying people what they want to pay them (assuming of course we’re talking about people making safely over minimum wage.)
Well, I don’t qualify for the Executive Exemption- I don’t manage anyone.
I don’t qualify for Administrative- again, I don’t manage anyone.
I don’t qualify for the Professional Exemption- I don’t work in a field of science or learning.
Not the Computer Employee Exemption- I don’t design software, I just use it.
I don’t do outside sales, so that one’s right out.
I don’t make over $100k, so I’m not “Highly Compensated”.
The only one I would qualify for is the Creative Professional exemption… but I don’t quite understand how “work requiring invention, imagination,
originality or talent in a recognized field of artistic or creative endeavor” doesn’t cover *every *artist who makes more than $25k a year - it seems overly broad.