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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?
Exempt status used to be reserved for highly paid professionals (doctors, lawyers, managers).
At my last company, they made people work 72 hours a week for months. We had multiple heart attacks- and several divorces. They took advantage of the bad job market created partly by the fact that companies can work IT people 72 hours a week.
Anything over 45 hours a week should be overtime until you hit the top 20% of income or you are supervising, hiring, firing, and making pay decisions over at least a few other people.
Any work on actual holidays should be double time.
Conditions in many IT shops in the united states are horrific now.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
And double time on Sundays.
Unions - the people who brought you the weekend.
Overtime of 1.5x or 2x discourages employers from having overtime, and instead hire more people. It's generally better for unemployment numbers to employe more people full-time than it is to over-employ fewer people by having them work lots of overtime.
Employees are somewhat discouraged to work overtime long term because usually the extra money is not worth it. But let us not pretend that employees have much say in when and how they work. They don't usually have a lot of bargaining power.
But labor unions do have a lot of bargaining power, and they have consistently pushed to have lots of overtime hours at a high pay so that union members can effectively net higher incomes. Higher incomes are usually good for individuals, unless they are doing it just to scrape by or have no choice in finding a good work-family balance. Higher incomes are almost always better for unions as it can increase the dues they collect without diluting their voting blocs with the introduction of a lot of new members.
The system of employers and unions is quite corrupt, I hope that isn't a surprise to any of you.
I think employers should pay 3x overtime, but only give 1.5x to the employees and 1.5x goes into a social program. I don't really care which one, but best to pick one that has the right poetic justice. Like financial support for the unemployed, or healthcare for the poor. If you're force to work 10 hour days, might as well force you to send the money to someone who can use it rather than line the pockets of your union reps. I was tempted to suggest that it would be 1x to the employee and 2x to a fund, but I know that it would make it easier for people to collude to work off the clock if there is zero benefit to whistle-blowing. (not that 50% of your hourly rate is much payment for something high risk like reporting your company for fraud)
The other advantage of having the overtime go to a fund is when a business tries to commit fraud it becomes a type of tax fraud. The IRS is way more aggressive at pursuing tax fraud than the various state agency that handle prosecution of compensation that violates state code.
“Common sense is not so common.” — Voltaire
My contract specifically states that I can't work any overtime at all. I can only work from Monday through Friday during normal business hours. That's fine with me.
The 40 hour work week and overtime pay was a part of Roosevelt's New Deal as a scheme to get more people employed, at least part time. It wasn't part of anyone striking or dying.
Thanks for the link, AC: http://www.economist.com/blogs... ... The Greeks are some of the most hardworking in the OECD, putting in over 2,000 hours a year on average. Germans, on the other hand, are comparative slackers, working about 1,400 hours each year. But German productivity is about 70% higher. ... So maybe we should be more self-critical about how much we work. Working less may make us more productive. And, as Russell argued, working less will guarantee âoehappiness and joy of life, instead of frayed nerves, weariness, and dyspepsia"."
"Working hours: Get a life
Interesting comments there like on work culture in South Korea, and I've just read the first couple comments of hundreds...
A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
I think the point is that currently the 50-60 hour work week is baked into a high salary. I think a lot of companies and employees would be better with a lower base salary but with overtime pay on top of that instead of fixed high salary. During lean times overtime could get cut back, making salary costs more flexible, and likely reducing layoffs as a result. Employees would likely work 8 hour days more often, and be more likely to have their productivity needs met rather than being expected to just burn more hours.
The current setup has a perverse incentive to work employees extra hours rather than hire the correct headcount. Anything over 40 hours of work is "free" for the company.
Companies that compete by expecting 60 hours of work from all employees necessarily create an unhealthy work environment, and defacto discriminate against workers with families.
So, I've been an IT professional in the past and transitioned to industrial control systems. In IT I was a contractor that only got payed for my billable hours. I spent long days but got payed very fairly for the hours I billed.
When I moved into control systems my pay was negotiated as salary, I got insurance and retirement. But when I actually started working it was all figured hourly. The problem was it didn't matter how many hours I worked, I got payed for 40. I was always told to 'take time off', but there was never time. Always another project, always another emergency. 50 hours a week and on call every night became the norm. Eventually I got sick of it and switched jobs.
Now I'm actually an exempt employee. Most weeks are 40 hours, some are more like 50 and I get an occasional call at night. My boss is rabid about me taking a day off when I get a crappy week and never quibbles when the day is slack and I leave early. My team is expected to work 40 and OT is authorized as long as the employee isn't getting burned out. The only problem with this setup is it's easy to get slack. Without the constant pressure it's easier to let things slide. I find that if I drive my team hard on a project every couple of months, they stay more productive when the workload is normal.
It's been interesting to see how the individuals react to working conditions, what motivates them (and myself), and how to make sure they don't drive themselves too hard while still getting the job done.
Like Stalin used to say cemeteries are full of irreplaceable people. That's why.