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Should IT Professionals Be Exempt From Overtime Regulations?
Paul Fernhout writes: Nick Hanauer is a billionaire who made his fortune as one of the original investors in Amazon. He suggests President Obama should restore U.S. overtime regulations to how they worked in the 1970s to boost the economy. Quoted by PBS NewsHour: "In 1975, more than 65 percent of salaried American workers earned time-and-a-half pay for every hour worked over 40 hours a week. Not because capitalists back then were more generous, but because it was the law. It still is the law, except that the value of the threshold for overtime pay — the salary level at which employers are required to pay overtime — has been allowed to erode to less than the poverty line for a family of four today. Only workers earning an annual income of under $23,660 qualify for mandatory overtime.
Many millions of Americans are currently exempt from the overtime rules — teachers, federal employees, doctors, computer professionals, etc. — and corporate leaders are lobbying hard to expand "computer professional" to mean just about anybody who uses a computer. Which is almost everybody. But were the Labor Department instead to narrow these exemptions, millions more Americans would receive the overtime pay they deserve. ... The twisted irony is, when you work more hours for less pay, you hurt not only yourself, you hurt the real economy by depressing wages, increasing unemployment and reducing demand and innovation. Ironically, when you earn less, and unemployment is high, it even hurts capitalists like me." If overtime pay is generally good for the economy, should most IT professionals really be exempt from overtime regulations?
Many millions of Americans are currently exempt from the overtime rules — teachers, federal employees, doctors, computer professionals, etc. — and corporate leaders are lobbying hard to expand "computer professional" to mean just about anybody who uses a computer. Which is almost everybody. But were the Labor Department instead to narrow these exemptions, millions more Americans would receive the overtime pay they deserve. ... The twisted irony is, when you work more hours for less pay, you hurt not only yourself, you hurt the real economy by depressing wages, increasing unemployment and reducing demand and innovation. Ironically, when you earn less, and unemployment is high, it even hurts capitalists like me." If overtime pay is generally good for the economy, should most IT professionals really be exempt from overtime regulations?
No.
Strange. because it has been a few decades since I was in the salaried worker pool. But way back then, I wasn't aware of a threshold. I got overtime (1.5x) or not depending on the definition of my job. And back then I was bringing in around $150K/year.
The OT/no OT decision was based on the definition in the National Labor Relations Act of an exempt professional: doing work
"involving the consistent exercise of discretion and judgment in its performance"
and
"of such a character that the output produced or the result accomplished cannot be standardized in relation to a given period of time"
So when the boss walked up and told me how to do my job, or told me that he expected me to work to a rigid schedule, I just replied, "Thanks buddy. That'll be $120/hour for anything over 40 hours per week. Or get your damned nose out of my cubicle and I'll solve the problem as best I can."
In spite of this sounding like a rather snotty attitude, it did serve to remind my employer of the economics of employees as a resource. You want X done at a certain rate (lines of code, sheets of engineering drawings or pages of specifications), fine. Pay for the work by the hour. You want me to take on some risk for getting a challenging job done? I'll work for a fixed price, but only if I have the flexibility to control my processes, tools and working environment. Quite a few enlightened managers saw the value in the latter option.
Have gnu, will travel.
So the whole tech industry business model is flawed ?
Yes.
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.
Other companies frequently fight it claiming that since they pay on an annual salary basis rather than an hourly basis they don't track it and therefore don't have to pay. These arguments lose.
Many companies like to skirt around the law since it saves money. Many companies (wrongly) claim that workers on an annual salary are exempt from overtime. Many companies (wrongly) specify that a position is exempt from overtime when legally it should not be. Even if you are paid on a regular salary instead of hourly the company is still obligated by FLSA overtime regulations.
If in doubt, make a phone call to the department of labor or whatever your state's equivalent is. They can ask a few questions and determine your status. Businesses violating the law are generally forced to pay back wages to the individuals and back taxes to the government. Since government really hates to miss tax money they tend to enforce this whenever discovered.
//TODO: Think of witty sig statement
Yes, just ask those money-making auto-workers in Detroit how well that worked out for them. $45 an hour, 2 months paid vacation, retirement, to stand there and push a button all day? And everyone feigned such shock when the companies said "F*$% it, we'll move to Mexico!"
Just prior to the 2008 economic collapse, France's employment for those aged 25 - 54 was around 83%, compared to 80% in the US. Lately, after the collapse and some recovery, the rate in France is 81%, compared to 76% in the US.
France has good educational opportunities, skewing comparisons for those under 25, and good retirement benefits, skewing comparisons for those over 54. But apples-to-apples for the core years of productivity show France has the right idea.
Oh wait it has been tested. In Germany. Where I got overtime pay as a software developer so that when I had to do a production deploy on a sunday I could go home early for the next week or get a half day off or choose to get it paid out. Last time I checked the German economy was going strong despite (because?) of this. Obviously an American doesnt "understand" these things at all as these are foreign concepts. Its much easier to accept that youre doing 80hour weeks yourself if you dont have to accept that 40 hour weeks are possible but you just dont get them.
Game development is the worse plague in the industry. Only finance companies come close, and they're not nearly as bad (because they pay up the wazoo. Game development shops do not).
Too many college kids went in with the thought having their name in the credits of the next Final Fantasy or Call of Duty. Supply and demand.
I am getting my data from the Federal Reserve's domestic and foreign data: http://research.stlouisfed.org...
Tons of data you can view there. Pull up France's 25 - 54 employment, and the US's. My statement is true.
You, and Business Insider, are pushing a narrative that relies on apples-to-oranges. You and BI are relying on unemployment data covering all 18+ year olds. But that's a ridiculous metric for a country with strong educational social programs for the younger generation and strong retirement social programs for the older generation. The young take the time to learn more skills, the old are able to retire at a much younger age than the wage slaves in the US.
But of course the free market fundamentalists are going to seize on faulty reasoning if it can be used as an argument to dismantle social programs and worker protections.
Salary has not inflated with work hours so they really would be willing to pay you that same $150,000 without the extra work if they had to pay the overtime and do staffing properly since reduced unemployment drives wages up.
Then by all means, ask for it. Better yet, start your own software firm offering that deal and poach all the good programmers. If the money is just sitting on the table, why aren't you out grabbing it?
The answer is, of course, that salaries are generally at equilibrium. Employees negotiate for as much as they can (I certainly do each time I change jobs), employers push back equally hard. Everyone arrives at the best deal they can. It's extremely unlikely there's a ton of extra salary just sitting there because IT pros forgot to ask for it or were all such pushovers they didn't get it.
Good developers will even be able t ojump in a bad market.
The people who most desperately cling to a shitty job are the wretched incompetents who couldn't get employed elsewhere. It's 100% the best way to have the most useless people working for you.
SJW n. One who posts facts.
Anything over 45 hours a week should be overtime until you hit the top 20% of income
Most people working in the IT industry ARE in the top 20%. The top 20% of wage earners(not households)
in the USA starts at about 53k.
I think exempt status should only be allowed for people that both don't track their hours and have a fixed workload.
Most of the IRS rules for contractor vs employee should also apply. If an employer can tell you when to start,
how long to stay, can give you more work, tracks your hours, etc... then you shouldn't be allowed to be exempt.
No, that is how (one metric for) UNemployment is measured. The FRED data I referenced is the comprehensive employment (_not_ UNemployment) of all persons aged 25 - 54 in France and in the US. No issues about measuring who's looking for a job and who isn't. You should actually look at the data source I posted instead of making these inaccurate statements.