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What do you mean exempt employees??

Exempt vs non-exempt

It is an American term, defined in American law. If you are not an American, there is no need to understand the terms. If you are an American, you certainly should. It means a job is exempt from the Fair Labor Standards Act (FLSA). Managerial jobs and most salaried jobs are exempt. Non-exempt workers are mostly those paid an hourly wage.

There are some quirks. Agricultural workers are neither exempt nor non-exempt, nor do minimum wage laws apply to them. This was designed to exclude black and Hispanic farm workers so southern white Democratic congressmen would vote for the FLSA.

For some weird reason, movie theater workers are also excluded from the FLSA.

Your understanding of "salary" is probably not in line with law, though it depends on your industry and state. It's very complicated (you can make a good living specializing in it as a lawyer). Here is a 5-minute rundown.

For most people in most industries, their "salary" is the minimum amount they can expect to receive from their employer each week, no matter how much they work. If this situation does not apply to you, then you become a non-exempt employee and are subject to all the hourly rules like overtime. This is the part that probably trips you up, as it leads to a lot of misunderstanding:

However, whether an employee is paid on a salary basis is a "fact," and thus specific evaluation of particular circumstances is necessary. Whether an employee is paid on a salary basis is not affected by whether pay is expressed in hourly terms (as this is a fairly common requirement of many payroll computer programs), but whether the employee in fact has a "guaranteed minimum" amount of pay s/he can count on.

In other words, just because your payroll system requires you to fill out a timesheet with 80 hours and your check seems to agree does not mean that is anything more than an implementation detail.

For programmers in CA, normally they are non-exempt, although I'm sure many skirt around it. My understanding is if you want a favorable equity package, you'll accept exempt status. If you want an hourly wage and a life, you declare non-exempt.

Both the Department of Labor and the courts disagree with your assessment.

The actual job duties themselves, not the job title, not the method of payment (hourly vs salary), and not the contract, determine if an individual worker is exempt from overtime rules.

This has been challenged time and time again in the courts. The concept of a "working foreman" is often mentioned since management is exempt from overtime. If the individual can show that at least half the time is spent on non-management tasks they are not exempt. If you spend 49% of your time or less doing management tasks you are not exempt. Even if your job title is "Managing Director", even if your contract calls you an exempt worker.

Although you are correct about the fact that the job duties matter, rather than the simple title, and you are correct about the fact that companies will give you a title, declare that you're salaried and therefore exempt, and try all sorts of other tricks to avoid paying overtime, you're wrong about one crucial thing - there's also an exemption for programmers:

Computer workers may be exempt under any of the "white collar exemptions," as bona fide executive or administrative employees. (See, FLSA Coverage.) For example, a "network administrator" may be performing administratively exempt job duties. There are, in addition, some special rules which apply to employees who work with computers and permit them to be classified as exempt even if they don't meet the usual requirements for exempt executives or administrators. However, there are special provisions which exempt some computer employees who might not otherwise qualify as "professionally" exempt. These include systems analysts, programmers (who "write code"), or software engineers. More specifically, the special computer employee exemption applies to workers who apply systems analysis techniques and procedures to determine hardware, software, or system functional specifications, or who design, develop, test or modify computer systems or programs based on user or design specifications.

And that's what the article and thread are discussing - programmers. Here is the fact sheet from the DOL. If you:

• are compensated either on a salary or fee basis at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour; and
• are employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field,

then you probably are exempt from overtime.

Some companies skirt this rule simply by paying "hourly" employees a salary above $23,600 (per FLSA) then work them 80+ hours a week and call it good. More and more employees, regardless of actual job duties are being paid a salary so they are then "exempt" from any overtime pay, even those that would traditionally qualify under the FLSA & I see this more and more often in the IT sector. If you look at the Computer Employee Exemption - you can make pretty much any IT job fit the bill if you phrase it correctly.

Workers are left with little recourse because:

• They've been exempt at every job they've ever had, so they no know different
• Many - even some of the learned ones - do not know how the FLSA applies to them in this situation
• Everyone around them is expected to work overtime w/out compensation, so it's not unusual.
• Regardless of what job duties they will be doing up to and, frankly, especially those including "non-exempt" duties they are told by management that they are doing "exempt" duties
• They have little real recourse, even if they know they are "non-exempt", unless other co-workers join them in a complaint. Co-workers who are unlikely to do so as:
  • There is little perceived gain and significant risk
  • It is expensive to the point of being cost-prohibitive in order to make a successful claim
  • Any employee who were to be successful would likely find repercussions pertaining to employ-ability later down the road. While not legal to do so above the board, it happens nevertheless (just look at all the wage-fixing and collusion in the valley - you actually think they'll hire someone again, or promote them over a co-worker who didn't sue?)

At the end of the day, LinkedIn is far from an anomaly, it is standard business practice - unless there is a top to bottom review by some third party (I don't know if there is even an entity that would be suited for this sort of endeavor), this practice will continue unabated. We will work more and continue to be paid less than what we earn.

Some companies skirt this rule simply by paying "hourly" employees a salary above $23,600 (per FLSA) then work them 80+ hours a week and call it good. More and more employees, regardless of actual job duties are being paid a salary so they are then "exempt" from any overtime pay, even those that would traditionally qualify under the FLSA & I see this more and more often in the IT sector. If you look at the Computer Employee Exemption - you can make pretty much any IT job fit the bill if you phrase it correctly.

Workers are left with little recourse because:

• They've been exempt at every job they've ever had, so they no know different
• Many - even some of the learned ones - do not know how the FLSA applies to them in this situation
• Everyone around them is expected to work overtime w/out compensation, so it's not unusual.
• Regardless of what job duties they will be doing up to and, frankly, especially those including "non-exempt" duties they are told by management that they are doing "exempt" duties
• They have little real recourse, even if they know they are "non-exempt", unless other co-workers join them in a complaint. Co-workers who are unlikely to do so as:
  • There is little perceived gain and significant risk
  • It is expensive to the point of being cost-prohibitive in order to make a successful claim
  • Any employee who were to be successful would likely find repercussions pertaining to employ-ability later down the road. While not legal to do so above the board, it happens nevertheless (just look at all the wage-fixing and collusion in the valley - you actually think they'll hire someone again, or promote them over a co-worker who didn't sue?)

At the end of the day, LinkedIn is far from an anomaly, it is standard business practice - unless there is a top to bottom review by some third party (I don't know if there is even an entity that would be suited for this sort of endeavor), this practice will continue unabated. We will work more and continue to be paid less than what we earn.

Because that would require management to do their job instead of trying to justify their 6-figure salaries. Personally, I'd say the reason why labor is exploited for overtime is because of the exempt salary provision in the law. Remove the exempt portion of it so all employees are covered by the overtime rules and such. That way, if managers think you need to be there beyond 8 hours, they'll pay you for it. Right now, if management tells me that I need to "work until the job is done", they are free to do so without providing anything extra for it.

You forgot to mention that since the H1Bs aren't coming in easily anymore, they've lobbied the US Gov. to allow them to deny overtime to anyone with a IT based technical skill regardless of pay level.

Unless you are, IT workers are already exempt from overtime pay; you are exempt IFF:

(a) Paid at least $23,600/year
(b) Paid on a salary basis
(c) Perform exempt job duties

IT workers fall under the "Exempt Job Duties - Professional" umbrella, just like computer programmers:

(a) Employees are performing exempt professional job duties if their work involves the application of advanced, usually specialized, learning or credentials of the type commonly associated with the "traditional learned professions" such as medicine, law, accounting or engineering.
(b) Computer professionals are exempt if they are paid on a salary basis, or hourly at a rate of at least $27.63

See here http://www.flsa.com/coverage.html and here http://www.overtimelawyer.com/areyouexempt.html to further educate yourself as to why you probably do not deserve to get overtime pay if you are an IT person.

-- Terry

I'm not saying I support this, but in order to understand this proposal you have to understand what an exempt employee is in US (and state) law. (IANAL: this is my rough-and-ready understanding of the system). There are two categories of employee, exempt and nonexempt, and different labor rules apply to each, about things like overtime, unionization, and benefits. There are several tests for whether a given job is exempt or non-exempt, including salary and job description. In general, people with managerial or administrative responsibilities are exempt, whereas those who work hourly and do not supervise others are nonexempt. But it's incredibly complicated (see, e.g., this page). So many IT workers were in a grey area, and this bill proposes to put those above the salary cutoff on the exempt side of the line. It does not mean singling out IT workers for some uniquely debased, exploited status, but rather putting them in the category of professionals/administrators/managers (which confers both downsides and potential benefits). You can agree or disagree with the move, but you need to appreciate how it fits into the context of American labor law.

I put emphasis on your last sentence because it should read:

You can agree or disagree with the move, but you need to appreciate how it fits into the context of *BAD* American labor law.

Labor laws are supposed to protect workers, not harm them as this bill would do. It is saying that if you make more than $X then you are exempt from overtime, regardless of the nature of your job. I am sorry, but the only things this bill helps are the corporations. They get a big chunk of money saved because they don't pay overtime to those people meeting the criteria. Not a way to recruit highly skilled labor for highly demanding jobs. Will only hurt things.

I'm not saying I support this, but in order to understand this proposal you have to understand what an exempt employee is in US (and state) law. (IANAL: this is my rough-and-ready understanding of the system). There are two categories of employee, exempt and nonexempt, and different labor rules apply to each, about things like overtime, unionization, and benefits. There are several tests for whether a given job is exempt or non-exempt, including salary and job description. In general, people with managerial or administrative responsibilities are exempt, whereas those who work hourly and do not supervise others are nonexempt. But it's incredibly complicated (see, e.g., this page). So many IT workers were in a grey area, and this bill proposes to put those above the salary cutoff on the exempt side of the line. It does not mean singling out IT workers for some uniquely debased, exploited status, but rather putting them in the category of professionals/administrators/managers (which confers both downsides and potential benefits). You can agree or disagree with the move, but you need to appreciate how it fits into the context of American labor law.

"Professionally exempt workers must have education beyond high school, and usually beyond college, in fields that are distinguished from (more "academic" than) the mechanical arts or skilled trades."

If they set the precedent that IT is a skilled trade, you would have MBA's heads popping all over the place from the impact upon tech companies bottom lines.

Who is covered by FLSA is not just about the work they do. There are of course jobs that are automatically considered exempt.
Even IT guys can be exempt from FLSA.
http://www.flsa.com/coverage.html

Only one of those over stressed people would need to report that to the DOJ. The laws on over time pay are laid out pretty clear, and this if true is not at all legal.

Except that those laws unfortunately don't apply to programmers.

This is where the system breaks down, because what it really means is that if I work more than 40 hours/week, I get paid for 40 (but my company can often bill out my actual hours). If I work less than 40, the company only pays me for the hours that I work (gee, how can we pay you for 40 hours when you only worked 32??).

Your company can only reduce your pay in full-day increments. Deducting for partial-day absences is illegal ("hrm, well, you came in late on Wednesday, so we're only paying you for 38 hours this week"):

With some exceptions, the base pay of a salary basis employee may not be reduced based on the "quality or quantity" of work performed (provided that the employee does "some" work in the work period). This usually means that the base pay of a salary basis employee may not be reduced if s/he performs less work than normal, if the reason for that is determined by the employer. For example, a salary basis pay employee's base pay may not be reduced if there is "no work" to be performed (such as for a plant closing or slow period), and a salary basis employee's base pay may not be reduced for partial day absences. However, employers may "dock" the base pay of salary basis employees in full day increments, for disciplinary suspensions, or for personal leave, or for sickness under a bona fide sick leave plan (as for example if the employee has run out of accrued sick leave).

IANAL, but if your employer is doing that to you, you should be able to sue them into oblivion.

Speaking of getting screwed - why are there specific regulations in the federal labor laws that exempt "certain computer workers" from overtime pay?

Isn't it obvious? Because there was lobbying by one or more major companies, and like the closet masochists they generally are, IT professionials never mounted a concerted challenge while the law was drafted!* It always amazes me how on Slashdot there are several hundred posts about any threat (real or precieved) of government infrignment of individual rights, yet there are a paltry few (such as yourself) that even notice large corporations and companies can pose a similar threat if unchallenged. I guess the possibility of de facto economic serfdom is acceptable to the majority of Slashdotters, provided it's only an employer that acting like a liege-lord and not a government.

*Note: I'm an Electrical Engineer, but I've worked closely with IT departments in the past.

This is why you never, ever trust an employer to do right by you. All the incentives are aligned the wrong way, and to rise high in a company, you practically have to be a slick sociopath. The same guy that asks you how your day went by the water cooler would have you chained to a desk 14 hours to day if the law would let him get away with it.

Speaking of getting screwed - why are there specific regulations in the federal labor laws that exempt "certain computer workers" from overtime pay?

Sorry, but most IT-type jobs of the "all-around skilled" sort are NOT exempt, as they do not fall under the classification. Generally, computer repair work is not exempt, regardless of how skilled you are at being, say, an all-around IT support person.

If you've been told otherwise by your employer, then they are cheating you.

http://www.flsa.com/computer.html

is an interesting read, and far clearer than any discussion I've seen to date.