Now, I am all for raising minimum wage, all of my employees make considerably better than minimum wage. I am pretty much for most labor issues, but this one does not make any sense to me.
It is raising the exempt salary requirements from $455 a week to $913, more than double, and is due by December 1st.
I have a manager that I pay $650 a week, that’s a pretty good wage ($34,000 a year). I had been planning on giving him a raise this summer to $700 a week. He probably puts in about 55-60 hours most weeks. He is pretty happy with the arrangement.
I have spoken to him about the issue, and he agrees that he would rather not go back to being an hourly employee. Partly a status thing, clocking in and out is for employees, not management. Partly convenience, he does some of the paperwork from home and we alternate taking calls from home on our days off, hard to manage that if he’s gotta be on the clock whenever he is working.
Going to an hourly model would be annoying as hell. Be another set of hours to track. It would be less stable for him, some weeks he works more than others, with salary, it doesn’t matter, and he has no problem taking a day off from time to time when things are a bit slow. Once he’s hourly, me giving him a day off is cutting his hours and his paycheck, which I don’t think is quite fair. And, much as I would like to, I cannot afford to bump him up to the $913 a week rate at this time.
I assume that this will pretty much completely eliminate food service management, especially fast food management, as a salaried position as well. I have to wonder if that is what was actually being targeted by this rule change. In food service, hourly managers were not really considered to be managers, just shift supervisors. They never took part in most of the actual running of the store itself, just running shifts. So, I think that this will end up being a pretty big blow to the quality of management in food service. (Not that it was all that high for the most part, but I see this as creating incentive to drop it further.)
If it had been bumped up to $500, or $550 a week, or maybe even $700 -$800 over a couple years, I could get behind this. But this seems way too much, way too fast, and as much hardship it is causing me, I assume that many other small businesses find this to be troublesome.
Anyone know what the reason was for such a large bump in the salary requirement? Anyone else find themselves in a position to be affected by this?
I don’t know where you live and salaries are pretty location-dependent. If he works 60 hours per week for $650 per week, you are paying him less than the legal minimum wage where I live including the premium for overtime an hourly worker would earn. $700 per week for those hours still wouldn’t equal the minimum wage in my jurisdiction. That minimum wage is going up significantly next year too. Not everyone agrees that what you are paying is a good wage.
Do the math … looks like paying him a “base” $700 a week, adding overtime may come out to $1,000 a week … so give him a raise to $920 a week … not only is it cheaper, but with the raise you can really work over the poor soul.
The Department of Labor’s fact sheet accompanying its rule change says they changed the rule to expand the number of people eligible for overtime. In 1975, 62% of workers were eligible for overtime based on their salary. Now it’s just 7%. They also note stagnating wages over that same period.
Although the statement doesn’t make the connection, one issue is that some employers are probably categorizing people with no professional or managerial responsibility as salary workers to get out of paying overtime. You allude to that same issue when you talk about fast food managers.
I’d like to know why the OP expects the guy to work 60 hour weeks, work at home and cover on-call weekends.
The difference between the current salary and the increase is only 13.6K a year. According to the OP, that’s the difference between profit and bankruptcy.
[Quote=k9bfriender]
In food service, hourly managers were not really considered to be managers, just shift supervisors. They never took part in most of the actual running of the store itself, just running shifts.
[/quote]
So you’re just calling a shift lead a “manager” to be able to work him extra hours at a low wage with the added benefit of not having to pay overtime?
I’d say this change is long overdue.
Have to agree with the above. $34k/year for a manager isn’t at all impressive, not for someone who also has to work from home and be on call. I mean, heck, I used to work 37.5 hours a week as an hourly worker and made $50k a year, the managers at that company made significantly more than that. (Note that while I no longer work for that company, the company is still very much in business and doing well)
The change has been made to avoid exploiting people by calling them a “manager” and forcing them to routinely work longer than 40 hours/week without having to pay them overtime or much money. That is not to say your particular arrangement with your particular employee is inherently exploitive, but as you noted with the fast food “managers” the rules were being used to avoid paying overtime to people who were not in any practical sense managers.
If this negatively impacts your particular case that is unfortunate, but it must be weighed against the exploitation of people who are being forced to work very long hours for $23k a year when they aren’t really managers.
The reality is a lot of companies take employees that really are hourly and call them exempt to avoid paying overtime. On principle it think most retail/fast food/etc. managers should be paid as hourly employees not only to protect them from economic abuse but lets face it, their job description is that of an hourly employee - be here these days at these times. IMO (and as hinted to by the DOL) an exempt employee should be able to performed their assigned duties without having a schedule.
Do you give this guy paid vacation time? Any other benefits?
I don’t quite understand it when businessmen complain about having to perform basic business practices. It’s part of running the business, just deal with it.
[QUOTE=k9bfriender]
Going to an hourly model would be annoying as hell. Be another set of hours to track.
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I can understand aggravation at having to do more work that doesn’t actually add to the bottom line. Unfortunately, I can’t help but think that the real issue is that k9bfirender would have to value all those overtime hours at time-and-a-half and it might make him less likely to call his manager on a whim and make him work so many overtime hours. Also, if his manager were to tabulate all the hours he worked and figure out what his real hourly rate is, the manager might not be so happy with k9bfriender’s deal at all.
50-60. Usually closer to 50. We are still growing, and I am working on giving out raises. I only take home about $450 a week these days, so it’s not like I am shorting him for my own gain.
Not sure how you get a number that low. Even at 60 hours, at 650 a week, is $10.83, factoring OT takes it down to $9.28. Yours is a pretty loose approx., misleading even. Figure at 50 (more typical week)hours, that’s $11.81
My employees, of which I am up to 6 now, make a range from $11 an hour to $20.
Using czarcasms “approx.” I’d agree. using the actual numbers, don’t think it’s so bad.
I am not sure I can follow your math there. $270 a week more is not less.
That last bit of math I could follow, just not sure if it’s a random thought, or somehow related to the post.
Yes, and there is very much cases of abuse in salaried positions. I have seen and experienced such. I was a Wendy’s manager for $26k a year, working 80 hours a week. That sucked. There are people who are not administrative or supervisory at all that are on salary as a way to sneak around the requirements. I do not disagree that some tightening up is in order, I just feel that this one is doing more harm than good. Definitely to small business, and I believe to the managers themselves.
Expect? Nah, he would rather do some of the paperwork at home. He could do it here in front of the computer, but he would rather go home, start dinner, and do it there. That’s fine with me, but no longer going to be fine with the DOL. Covering calls is just answering the phone, talking to a client, and maybe making an appointment. It’s not being “on-call.” That’s on Mondays, as that is the day we are closed. We alternate more or less back and forth on who is getting calls on Monday. Those hours he spends at home are mostly included in a 50 hour week, and definitely if you figure 60.
Only 13.6k a year is maybe not the difference between profit and bankruptcy, but is much more than my profit margin last year, so difference between profit and loss, definitely. This is the best paying job he has ever had, and he is quite happy with the current arrangement.
Not me, I mentioned that that is what is happening in food service, and they are doing the opposite of what you are insinuating I am doing, in that they are replacing salaried positions that pay $30-$40k a year with hourly positions that pay in the mid 20’s. That is something that I think will lower the quality of managers in such fields. Most food service managers, and my manager, have no college education, and their prospects of a decent paying job are pretty much salary positions like these that are going to go away.
He does do payroll. He does scheduling. He posts pictures of our clients. He handles quite a bit of administrative stuff so I don’t have to.
He also sits around and plays facebook games when there is nothing immediate that needs to be done. I don’t care, it’s not like I am paying him by the hour, yet.
I recently hired another employee that does a bit of the work that we had to do to get done every day. That means that he leaves about an hour earlier than he used to. He gets paid the same though. With the new rules, if I make his job easier, I will also have to cut his pay.
You would be entirely wrong if you are thinking what you are unfortunately thinking. In fact, he is the one who brought the subject up. He was complaining that he’d have to start clocking in again. He was wondering if he would still be able to take care of paperwork from home, or if he would have to do it all at the shop. So, you are way off on your insinuations there, you may want to check yourself before making such accusations in the future.
Yes, 2 weeks a year, matching IRA up to 3%, sick days, and we are working on health insurance, but are not there yet.
Not a complaint, just another thing to do, for no real reason. And he’s actually the one who will probably need to actually do the work of tracking his own hours, as he does payroll most of the time these days.
Yes, it is so bad using real numbers. Let’s split the difference – 55 hours for $650, That’s less than $12/hour, which as I’ve already stated, is suckage for a manager. And if you want to say he really isn’t in fact a manager, then you’re calling him one to deliberately bypass overtime rules.
I’m sorry for the insinuation. He doesn’t make a lot of money for my area but his pay may be good for where you live and if he likes his working conditions, who am I to judge?
For what it’s worth, he doesn’t have to “clock in” to be paid by the hour. He just needs to be paid for the time that he works. You can agree to pay him by the hour based on time sheets he fills out that only you and he ever see.If your manager’s concern is that he doesn’t want to punch in using the same clock that his employees use, you can work around that problem. There is also no reason he can’t keep working at home if you let him, whether he’s hourly or salary.
You can also find a rate of pay that at least approximates what you pay him now but also gives him overtime when he works it. If he works an average of 55 hours per week, $11.20 per hour will mean an average gross pay of $700 per week once the overtime is figured in. If he works an average of 60 hours per week, you need to pay him an hourly wage of just $10.00 per hour for him to gross $700 per week. That last wage is below the minimum wage in some places.
I don’t see an obstacle to him working at home for part of the time, that would essentially be a telecommuting arrangement. He might need to formally track the hours he does paperwork at home, but that’s not a huge burden. It doesn’t sound like you have any trust issues with him so you would be comfortable with him self-reporting, yes?
There’s also the concept of “flexible working arrangements”. I’ve had hourly jobs where I worked different numbers of hours on different days dependent on company needs. Seems to me that you, as boss, and him, as responsible employee, could negotiate exact hours as needed so if he did need to take an afternoon off for whatever reason that week he could work additional hours on other days to give the company his full measure of work.
Yes, you’d both have to change some habits but even if he has to go hourly there may not be a need for drastic changes.
Also, just being a salaried employee doesn’t mean you don’t get paid overtime.
You need to also pass the “duties” test.
If your “manager’s” duties are more akin to an hourly worker’s duties, he’s not exempt from overtime law, and if that’s the case, you might owe him a good bit of money.
Labor/employment law is what I do for a living (although I’m certainly not YOUR lawyer). My advice is that you get a lawyer, though, and figure out whether you’ve misclassified your “manager.”
As regards the social policy issue-
Sure, technically speaking, they “doubled” the old threshold, but when the old one was a grossly inaccurate economic representation of real wages, the purely mathematical comparison is rightfully exposed as bogus.
That’s pretty much the definition of “on call”, as it means that you are working, if needed. Long long ago when I was on call, I got paid for 2 hours of work for a simple 15 second phone call (or anything that took less than 2 hours) and was paid for a full day if it went over 2. That is in addition to the flat dollar amount I received simply for being on call in the first place.
If I work 10 hours in the office and 60 at home, that is a 70 work week. Period.