Was your job ever changed from salaried to hourly status? What happened after?

In My Humble Opinion
1

This is in an IT operations context, but I welcome any sort of imput here. Right now, there’s a rumor in my company that all of IT Operations is going to non-exempt (hourly status). What would the ramifications of such a change be? So many of us have to work occasional overtime I can’t believe the company would shoot themseves in the foot this way and incur enormous costs in overtime pay. In my current situation I work with one other person supporting a number of systems on a 24/7 basis and we trade off on-call duties.

Should I worry that we’ll be forced into shifts? I’m junior to my co-worker, so should I be concerned that I’ll be forced into a swing or graveyard shift to provide coverage without overtime? In our case, that would still leave 8 hours a day unaccounted for.

Are there legal decisions behind this? I remember hearing something about a labor law decision which said that some workers had been erroneously classified as professional, and really should be non-exempt.

2

Oh boy. This just happened to me.

I work for a small company that consists of the president, a middle-management type and about 10 legislative research analysts. It’s always been pretty borderline whether the analysts should be exempt (salaried) or non-exempt (hourly) but I have always thought it was correct that we were salaried, because it’s a job that is highly skilled (at least a bachelor’s required, some of the analysts have masters and law degrees.)

Anyway for the 4 years I have worked there, we were salaried and all was fine. We would do approximately 2-10 hours overtime each week during the “busy season” (January to April, when most of the state legislatures are in session.) But we had perks like flexible schedules and starting and ending times, the ability to telecommute, etc.

Well, one employee, who is a bit of a busybody, recently got dismayed with how much overtime we were doing and started researching if we should really be salaried. She even called the Department of Labor. She brought it up to my boss, who also consulted with the DOL, which said it would have to do an investigation. Then she consulted with a labor lawyer and he said that to cover her ass against a lawsuit, she better make us hourly and pay us back overtime for 2 years!

Sounds good, right? It’s NOT. It’s a total pain in the ass. Now we are forbidden to work more than 40 hours a week, which makes it very hard to get all our work done. We have to keep meticulous time records, which is very unpleasant for someone who has been in salaried, professional position since I have been out of college. Quite frankly, it’s degrading.

And while I might expect a windfall from the 2 years worth of back overtime pay, the problem is, since we didn’t have to keep timesheets or anything, how are we going to be paid accurately for the true amount of overtime we did? We’re not! So I have a feeling, my boss is going to try to get away with paying us the minimum she can.

3

Check out this Washington Post article from Feb 7, 2006:
http://www.washingtonpost.com/wp-dyn/content/article/2006/02/20/AR2006022001518.html

4

(Bolding mine.)

This is a concern for me too. Practically everyone here has bachelor’s degrees, and some have master’s degrees too. We currently have some flexibility in scheduling, as long as we’re consistent, although no regular telecommuting is allowed.

And yes, I confirmed that we are being moved to non-exempt (hourly) status. My supervisor says the impact to us should be nil, except that we’ll be eligible for OT, but as I said in the OP I can’t believe the company would not do whatever it can to minimize OT. which is why I’m worried about having to work an awful schedule. The work I do can’t always be done in 40 hours a week, and just swearing off spending time here wouldn’t help much. We have to troubleshoot incidents at any or all hours. It’d be nice to be paid for all that extra time, but it does feel like a degradation in class.

5

A few years ago, the firm I work for restructured their career levels and pay grades, and my position went from being a low-level exempt role to a high-level non-exempt role. Up to that point I had been working 45-50 hours/week.

I didn’t really mind the change, because:

  • They didn’t lower my salary; so with o/t I was making more money
  • They encouraged me to work <45 hrs / week, which was fine since I just had my first child and wanted to reduce my hours anyway.

Since we are a business services firm (accounting/consulting); I always had to keep careful time records anyway, so that was no change.

Then, to top it off, a few months ago I received a promotion and moved back into an exempt role. Since I was moving from non-exempt to exempt, they gave me a salary adjustment (to compensate for the o/t I was losing) on top of my raise. So I make more now than I would have if I had been exempt the whole time.

The only real drawback was the stigma of being non-exempt. But the shame ended up paying for a lot of diapers, so I dealt with it.

6

The last job I was at was salaried. Being in IT and on-call 24/7 for server issues there was a chance I could have spent a fair amount of time at work. After about 8-10 months into the job I was changed to hourly with no overtime allowed (no overtime because they didn’t want to pay time plus half). At the end of the day I’d make the same amount per year.

At first I wasn’t so thrilled because I liked getting the same check every 2 weeks. I tried to work with management to avoid moving to hourly. I told them if I had to come in Saturday night and work 5 hours on an issue, they’d HAVE to pay overtime. I didn’t mind working the few extra hours every now and then if it meant having the same paycheck all the time. They wouldn’t go for it at the time but considered working out some arrangement when it came to the paycheck. Until then they continued to pay me like I was salaried until I left a few months later.

I’m back to salaried pay now at the new job.

The one plus I can see for you is your working hours. If they see 4-5 employees working an extra 10 hours a week, and they’re paying 40-50 time and half hours, they might consider bringing in another person or two and shave some work off your plate.

7

I worked in IT and it was a nightmare when they put me to hourly. Because I could not have any overtime, it made it impossible to do my job if an emergency arose. Like when the Front Office system crashed at 4am I came in and worked form 4am to 8am. Now normally I worked starting at 9am. So I had to work till 8am then come back at 1pm to get my hours.

Then they started sending me home and calling me back in. Then if something happend and I had 37 hours by Thursday, I had to come in for 3 hours on Friday. Which was a pain since it was an hour commute.

So they gave part of my duties to managers who failed to do them. Not to mention that salaried employees earn bonus, which I no longer got, which amounted to close to 11,000 a year. That was a HUGE pay cut.

I eventually just quit. And the weird thing is they had to hire 2 full time and a part time to replace me. Bascially cause I am highly skilled at programming (I do it as a hobby) so I could write C# programs to a lot of the work and after I left, no one else could do this. And I did the C# at about 10% what it cost to hire a programmer.

And then I was also taken out of the executive committee so IT no longer had a voice on the decision making process at all. Which was bad.

8

What stopped you from saying, “Thank you for letting me know; I’ll look at it when I get in at 9”? And given that you were an hourly paid employee not on call and with no overtime, why were they ringing you at 4? They’re not paying you for it, so it’s not your problem.

9

As I mentioned above, this is actually going to happen. We’re having group meetings tomorrow, and then, over the rest of the week, each of us will meet our supervisors and a ‘Senior Compensation Analylist’ individually. I imagine they’ll force us to sign waivers promising that we won’t bring actions for unpaid OT in the past. Furthest thing from my mind, anyway.

Can anyone who’s been through this give me a clue about what happens next?

10

I haven’t really been through this, but I am an HR person. The info given above seems generally correct and helpful. My main advice to you would be to find out what the company has in mind in terms of authorizing overtime. Does all O/T need to be approved in advance? By whom? Who is their backup? Would it be helpful to have up to 5 hours of O/T per week/month be pre-approved at your discretion? Ask for that. Make sure management is realistic about what paying or avoiding paying time-and-a-half means to them. What do they want you to do if a major issue crops up at 2 in the morning? How about leaving early on Fridays if you already have 40 hours in? Will that be OK? Is the company’s policy to calculate 40 hours based on time actually worked, or do holidays, sick time and vacation also count toward the 40 hours? That last part is not governed by federal law, they only have to pay time and a half over 40 hours worked, but some companies are more generous. Also, find out if your state law has any specific O/T payment requirements. Some are more generous than the federal requirements. My comments based on federal reqs.

And don’t feel too degraded. My husband has a PhD and uses it in his job, yet is not exempt and any O/T would need to be approved. Bottom line, he works 40 hours/week. I believe there was also a major case about DOJ attorneys being classified as non-exempt, for irony. The law was aimed at providing coverage to all employees except those who are exercising managerial control, but that is so hard to define across all possible companies that the FLSA is just a hodgepodge of loopholes that companies want to stretch to fit an elephant through.

Congratulations on your new free time and/or money!

11

It’s not being hourly that’s degrading. It’s the constant war over overtime. Being forced to justify your own work is degrading. There is something about having to ask for permission to work late that gets under people’s skin. In many companies, the party line is that you just have to squeeze your work into 40 hours. No, you can’t have OT. No, you can’t have help. You just need to work harder or faster. You need time management skills. Your breaks go first, followed by lunch. Working off the clock comes next. Never is it acknowledged that you might have more than 40 hours of work. Your skill and efficiency is simply questioned in a threatening manner until you shut up.

Er, can you tell I’ve had bad experiences with this? So bad that in my last job search I made salary or discretionary overtime the top of my priority list.

It really agrivates me that the labor laws basically force people into a compesation situation that neither they nor their employers want, all for their own good.

Of course, it’s not like I work at EA.

12

Actually I was discussing this yesterday with my dad, a retired doctor, who spent the last part of his career reading X-rays and other diagnostic materials for life insurance companies on a contract basis, after he closed down his own practice. He was paid hourly while doing that, and very well too. That made me feel better.

13

Another thing to look into is how they’ll handle things like sick leave / vacation. I’m assuming you’ll still have some pool(s) of those times that you use up when you’re not at work, so you still get paid your full salary. As opposed to a strict wage-slave type of job where if you’re sick, you don’t get paid.

14

Turns out that we are going to get back payments too. I wish I knew more about how they are going to calculate it, based on the 8 years I’ve been here and the nine supervisors I’ve had during that time, and the umpteen projects I’ve worked on.

Any further developments at your end? Feel free to email me if you would rather take this offline.

15

This happened to me a year or so ago. I’m a technical writer, and the whole techpubs department went to hourly due to all the lawsuits that had been popping up over being asked to work too much overtime–I think our company wanted to head things off before anything happened here.

We were assured that in reality nothing would change–we’d still get paid for 40 hours like a salary, and anything on top of that would be overtime. We’d still get our regular sick time (we don’t have set sick time here–if you’re sick, you stay home…I think you need a doctor’s note after 4 days) and vacation time, and there wouldn’t be any “stigma” associated with being hourly instead of salaried.

I wasn’t crazy about it at first, because to me there was a stigma, even if it was only in my own mind. However, I’m one of these types who doesn’t make a move unless I’m really unhappy, so I stuck it out to see how it would work.

So far it’s been fine. I rarely work overtime, so mostly my check is the same as always (with slight variations depending on how many days are in the pay period). When I need to work overtime to get my work done, my boss justifies it. I don’t go overboard (so far the most I’ve ever done is 6 hours in a week) so it’s all cool. The only pain part of it is that I have to turn in a time sheet every week, but since it’s all online it’s not much of a problem.

I’m not sure I would choose it if given a choice, but in my particular case it’s been mostly a non-issue with one tiny downside and one rather nice upside (extra money for overtime).