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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?

21 of 545 comments (clear)

  1. No by tompaulco · · Score: 5, Insightful

    As a manager and an employee, I vote No for overtime regulation exemptions. If a business is dependent upon their employees working for free after 40 hours, then their business model is flawed and it is better for everyone if they go under.

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    If you are not allowed to question your government then the government has answered your question.
    1. Re:No by x0ra · · Score: 5, Insightful

      So the whole tech industry business model is flawed ? Anybody in the SV sticking to 40h/week is pretty likely to get laid off, if not fired, pretty quick.

    2. Re:No by gothzilla · · Score: 5, Insightful

      Isn't it though? Business took advantage of the one thing we geeks are known for, and that is that many of us have an incredible desire to constantly mess with technology. Instead of messing with what your boss wants for 40 hours a week then going home and messing with what you want for another 40, your boss gets all your time and you get none.

    3. Re:No by Luckyo · · Score: 5, Insightful

      It's called "race to the bottom". If the rules were legislated, everyone would have to stick to it.

      As noted, many things since golden age of 70s have been systematically eroded to their current level.

    4. Re:No by Moof123 · · Score: 5, Interesting

      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.

    5. Re:No by Frobnicator · · Score: 5, Informative

      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.

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      //TODO: Think of witty sig statement
    6. Re:No by An+Ominous+Coward · · Score: 5, Informative

      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.

    7. Re: No by Anonymous Coward · · Score: 5, Informative

      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.

    8. Re:No by An+Ominous+Coward · · Score: 5, Informative

      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.

  2. IT Professionals should receive overtime by Anonymous Coward · · Score: 5, Insightful

    Project managers should be held accountable for their dubious scheduling practices and failures to estimate and manage project schedules effectively. Greater reward for IT professionals working overtime would hopefully translate into more regular work schedules, rather than being coerced into taking time away from families and loved ones in order to cover a PM's butt.

  3. Everyone? by GrooveNeedle · · Score: 5, Insightful

    Why are we just discussing IT professionals?

    Why not have everyone who works overtime (defined as work done after 40 hours for a given week) be paid time and a half, regardless of their profession/job?

    And while we're on it, why not have a normal work week go back to 35 hours instead of 40?

  4. No way, not for me by Maow · · Score: 5, Funny

    I'm a self-made man - I built the hospital I was born in, started teaching myself at age 11 months, and I got to where I am on my own.

    I don't need the nanny state to make sure I and my peers are fairly compensated.

    What's next, mandatory clean water? Then clean air? Where does it end?

    Socialism, that's where.

    No way, not for me!

  5. As an IT Manager by Stargoat · · Score: 5, Insightful

    I'm an IT Manager. I weekly am required to make my dudes work 45-50 hours. Two or three times a year, they put in 65 - 70 hour weeks. They get nothing for the OT except MAYBE comp-time. I don't even get the comp-time.

    I am in favor of this. If the IT dudes were treated the same as everyone else, they wouldn't be required to work themselves half to death and get a reputation for being sullen.

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    Hoist Number One and Number Six.
  6. Abuse of overtime is resulting in unemployment by Maxo-Texas · · Score: 5, Interesting

    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.

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    She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
  7. A big fat no! by EmperorOfCanada · · Score: 5, Insightful

    I have worked at a very few places where it was cool hip and fun. Working late into the night was a joy and basically hanging out with like minded people. But the vast majority of programmers are wage slaves working in cubeville. Terrible management often results in death marches where programmers are basically expected to work 24 hours a day and sleeping is barely tolerated. These death marches are basically the norm at most companies seeing that most managers/marketing people over promise, under manage, and under pay their staff.

    These programmers desperately need protection. The few places where happy people love their jobs do not justify allowing companies (especially game companies) to exploit their workers to the point where their wives start an organization to protest the horrible working conditions (literally).

  8. "Working hours: Get a life" at economist.com by Paul+Fernhout · · Score: 5, Interesting

    Thanks for the link, AC: http://www.economist.com/blogs...
    "Working hours: Get a life ... 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"."

    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.
    1. Re:"Working hours: Get a life" at economist.com by rtb61 · · Score: 5, Insightful

      Gees, troll much. What are the modders asleep. I have found those that work the hardest get paid the least. Just look at all the poor schlubs on minimum wage working two jobs, IT workers get it real easy compared to them. So a mandatory minimum wage that pays for the cost of living in conjunction with full overtime awards and to cap it off and get rid of often substandard health insurance and replace it with universal healthcare.

      --
      Chaos - everything, everywhere, everywhen
  9. Re:The road to hell by Moof123 · · Score: 5, Insightful

    No, you don't "deserve" anything other than what you negotiate

    Did you negotiate to have a safe work environment? How about handicap accessibility should you ever end up, even temporarily, in a wheelchair? Id you negotiate a lower salary in trade for not having to endure sexual harassment? Your statement is very naive and immature (read Ayn Rand much do we?).

    There is huge value in have the playing field somewhat level for a lot of basic things. Employment is inherently a lopsided arrangement. The employer has a lot more power than you do, so it become necessary to have some bigger entity keep things fair, safe, and liveable. Unions along with state and local government end up balancing the scales.

    History is littered with examples of company towns, H1B abuse, child labor, black lung, and many other dark chapters for employees who could choose between whatever the company chose or starving in the street (or worse). Arguing that most employees have almost any meaningful bargaining power is just moronic.

  10. Nobody should be exempt by msobkow · · Score: 5, Insightful

    Nobody should be exempt from time and a half except the owners of a business. Anyone who works for pay should get paid overtime, if only to punish companies and businesses that insist on overworking their employees instead of hiring more staff to handle the load.

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    I do not fail; I succeed at finding out what does not work.
  11. Studies show hours worked past 40/wk unproductive by Paul+Fernhout · · Score: 5, Insightful

    So, ultimately, the whole thing is self-defeating in general. Crunch times may be one thing, but on a regular basis, productivity declines even as people look busy.

    One example:
    http://www.inc.com/jessica-sti...
    "The most essential thing to know about the 40-hour work-week is that, while it was the unions that pushed it, business leaders ultimately went along with it because their own data convinced them this was a solid, hard-nosed business decision....
    Evan Robinson, a software engineer with a long interest in programmer productivity (full disclosure: our shared last name is not a coincidence) summarized this history in a white paper he wrote for the International Game Developers' Association in 2005. The original paper contains a wealth of links to studies conducted by businesses, universities, industry associations and the military that supported early-20th-century leaders as they embraced the short week. 'Throughout the '30s, '40s and '50s, these studies were apparently conducted by the hundreds,' writes Robinson; 'and by the 1960s, the benefits of the 40-hour week were accepted almost beyond question in corporate America. In 1962, the Chamber of Commerce even published a pamphlet extolling the productivity gains of reduced hours.'
    What these studies showed, over and over, was that industrial workers have eight good, reliable hours a day in them. On average, you get no more widgets out of a 10-hour day than you do out of an eight-hour day."

    With software, it is so easy to introduce a bug when you are tired or distracted (one reason team programming often saves money). A bug (especially a conceptual one) might be very expensive to debug down the road, especially if it makes its way to production. How many times have programmers spent days chasing a bug that was a one line fix? So, it may well be the case that longer hours mean *negative* productivity and higher costs for the extra hours worked past 40 per week even when the employee is not paid for the hours.

    There is another complicating factor. Big companies in the 1970s such as HP or IBM invested in actually training employees, creating the pool of workers that Silicon Valley drew from initially. Investing in employee training is now rare, due in part due to little loyalty on either side of the employee/employer relationship in many companies. So, given that the tech industry moves so fast, where does the training time come from (including to read Slashdot :-)? Ideally, training should happen during those 40 hours. But in practice, many people working in IT have to keep current on their own time.

    Yet training produces many benefits:
    http://www.psychologicalscienc...
    "A new study from a team of European researchers found that job training may also be a good strategy for companies looking to hire and retain top talent. When workers felt like they had received better job training options, they were also more likely to report a greater sense of commitment to their employer.
    For the study, psychological scientists Rita Fontinha, Maria Jose Chambel, and Nele De Cuyper looked at IT outsourcers in Portugal-who must constantly update their skills in order to keep up with the fast pace of new technology. The researchers hypothesized that when people were happy with the training opportunities their employer provided, they would be more motivated to reciprocate with an enhanced sense of loyalty to the company.
    This kind of informal balance of expectations between employees and management is known as a "psychological contract." When workers feel that their employer has fulfilled their obligations under the psychological contract, they're more motivated to uphold their

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    A 21st century issue: the irony of technologies of abundance in the hands of those still thinking in terms of scarcity.
  12. Re:Yes. by dbIII · · Score: 5, Insightful

    It was baked into the religion for the same reasons as the ten commandments - to produce a society that was more than barbarism. It's harder for the unscrupulous to work their slaves to death if they have people looking over their shoulder demanding that nobody works 7 days a week.