We have a salaried employee who typically works over 40 hours per week. Said employee is claiming that labor laws state we still must pay them overtime. I can remember Obama passing a similar law, however, I was under the impression it pertained to large employers. We have less that 20 employees. Of which probably 5 are full time. Any feedback is appreciated. Thanks in advance.

I believe the salary rate equates to $17/ hour....

My industry had to pay up. This was before Obama. I think we now disclose it better or pay better to stay above some amount?

I would highly question if I would want this person working for me in the future.

early 30s so just about....

depends on the district.

Was this something mentioned in a breakroom as a one-off or was this brought up in a scheduled meeting?

first mentioned to his supervisor who then approached me about it...

I think it has something to do with the type of work, if it's considered managerial or not. The company I used to work for was famous for having "salary managers" working 50 - 60 hours per week but performed a lot of grunt work that hourly workers would normally do and got in trouble for it.

I know this was an issue recently for post doctoral fellows who were getting paid yearly salaries of ~$42000, then someone brought up the labor laws and they all got bumped up to $48000 (which I assume is that $17/hour mark posted earlier in this thread) to avoid litigation. That decree came down from NIH.

Ranger222 said:

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I know this was an issue recently for post doctoral fellows who were getting paid yearly salaries of ~$42000, then someone brought up the labor laws and they all got bumped up to $48000 (which I assume is that $17/hour mark posted earlier in this thread) to avoid litigation. That decree came down from NIH.

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$17/hr is a shade over 35k. I always just take the dollar amount and double it to give a rough guess of how much someone costs over a year, before the employer taxes, workers comp, etc.

42k is nowhere near that cutoff, unless other employer costs are factored in like taxes and health insurance.

We saw the 42 to 48 bump as well.... Maybe it is a thing.

"The change under the Fair Labor Standards Act doubles the annual salary threshold to $47,476 from the current $23,660 that generally determines who qualifies for overtime pay when they work more than 40 hours a week. That means salaried workers who earn less than $47,476 will now be eligible for overtime pay."

I think A&M went with this as well. Looking for the source now. Employees close to threshold were bumped up. I believe that salaried employees under were changed to hourly.

https://squareup.com/townsquare/new-overtime-rule-overtime-pay-for-salaried-employees

It was in litigation, but I think many large employers moved forward with it.

Eh. Ive been of the philosphy that isolated OTn necessary to get the job done on time or for small amounts of rework, I dont charge. Repeated and ongoing OT i charge but Im just talking about straight time pay. Salaried employees just get straight time not time and a half for over 40 hrs anyway.

Is that what is being talked about? Time and a half? I guess Im not used to that bc everywhere Ive worked since college has been straight time OT for salaried folks.

jamaggie06 said:

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Eh. Ive been of the philosphy that isolated OTn necessary to get the job done on time or for small amounts of rework, I dont charge. Repeated and ongoing OT i charge but Im just talking about straight time pay. Salaried employees just get straight time not time and a half for over 40 hrs anyway.

Is that what is being talked about? Time and a half? I guess Im not used to that bc everywhere Ive worked since college has been straight time OT for salaried folks.

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For example at A&M, salaried folks received nothing for extra work. Grad students were impacted tremendously by this. Many were salaried but worked 50-60 hours a week without extra compensation.

This was an issue at my first job out of school, although I can't remember the specifics. Another guy and I were hired as salesmen at $36k, and immediately sent to a fertilizer terminal to do grunt work for 3 months. 7 days a week, 80-100 hr weeks were the norm, with several 120 hr weeks in the mix. We were required to clock in and out, and someone on the board pointed out they were probably breaking some labor laws with the hours we were working and not getting any overtime, so the solution was for us to stop clocking in. It was a good "pay your dues" job, but that's about it.

I was salary non exempt years ago. Got standard time OT after 40 hours.

I thought this was relatively common?

But regardless isn't this a moot point for companies under 50 employees?

62strat said:

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I was salary non exempt years ago. Got standard time OT after 40 hours.

I thought this was relatively common?

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No this is very rare. Especially today.

Duncan Idaho said:

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62strat said:

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I was salary non exempt years ago. Got standard time OT after 40 hours.

I thought this was relatively common?

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No this is very rare. Especially today.

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I was a PE, who occasionally worked offshore. This set up was how my company did it.. on land you'd get your salary, but if you go offshore, you get your hourly rate up to whatever you put on a time sheet. (typically 7x12 = 84 hours). So you basically got paid about double that week.

It was the same setup I had over 12 years prior, for summer jobs in college. A salary employee, but the few times I went offshore, I'd get straight time overtime over 40.

Obama's gross abuse of power was struck down in August:

http://thehill.com/homenews/administration/348752-texas-judge-strikes-down-obama-overtime-rule

Having said that exempt is supposed to be determined primarily by job duties and not pay. That's actually why the judge struck it down because money isn't supposed to be the determining factor but rather a secondary one. Unfortunately the damage was done since the injunction was issued so close to the implementation deadline and most had already adjusted. Now the rules are back to the duties test and $23,660 which I believe equals $11.92/hour.

If you meet those what would entitle you to overtime? Side from the obvious brewing HR problem this question suggests that would be my response.

Thanks for the link, Loyal!

It depends on whether they are am exempt employee, per Texas employment laws. You might have to pay them OT even if they are salaried.

Here's a list of employees who are Exempted from overtime.

http://www.twc.state.tx.us/news/efte/exemptions_from_overtime_only.html

LOYAL AG said:

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Obama's gross abuse of power was struck down in August:

http://thehill.com/homenews/administration/348752-texas-judge-strikes-down-obama-overtime-rule

Having said that exempt is supposed to be determined primarily by job duties and not pay. That's actually why the judge struck it down because money isn't supposed to be the determining factor but rather a secondary one. Unfortunately the damage was done since the injunction was issued so close to the implementation deadline and most had already adjusted. Now the rules are back to the duties test and $23,660 which I believe equals $11.92/hour.

If you meet those what would entitle you to overtime? Side from the obvious brewing HR problem this question suggests that would be my response.

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this was the legal opinion I received as well, since we were in this district.

I think I am more confused now than before I started the thread.

We have aprox 14 employees.
2 of which are full time
Said FT manager has a salary of $61k/year
Said FT manager works around 60 hours a week-though can get as high as 70 during peak times

BoDog said:

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I think I am more confused now than before I started the thread.

We have aprox 14 employees.
2 of which are full time
Said FT manager has a salary of $61k/year
Said FT manager works around 60 hours a week-though can get as high as 70 during peak times

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FT manager is making about $19/hr (assuming an average of just over 60/wk 52wks/yr). With only 2 FT employees, their benefits are possibly not much more than the part time guys. If your typical pay for PT guys is a few bucks less than $19, then I don't really see a problem. However, if you have PT guys making more than $19 under him, you might rethink the pay scale for the FT manager. Of course, if FT manager is getting benefits (paid for health insurance, employer contribution to retirement plan, etc) that the PT guys don't get, it adjusts the scale somewhat.

I'm also assuming your PT guys aren't getting a lot of OT. It could be frustrating to see the guys below you regularly taking home bigger paychecks while working fewer hours. IMO, there is a difference between a guy just trying to squeeze and employer for more $ and a guy frustrated that he is busting it and taking him less than people that are doing less and wondering why he is getting screwed just because he has more responsibility.

Assuming FT manager take home is actually better than PT guys, someone might sit down with FT manager, talk about why he is exempt and that the hours are part of the job and why the pay is $61k/yr, but that if the hours are an issue, FT manager could be moved to another position in the company with an appropriate adjustment in pay (and overtime rules). This would work a lot better if it doesn't come across as a confrontation and threat due to complaining, but rather a conversation about what concerns the employee has and how can the company address those concerns.

No, our PT people probably average about $12-$13/hour with about 30 hours per week.

dubi said:

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jamaggie06 said:

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Eh. Ive been of the philosphy that isolated OTn necessary to get the job done on time or for small amounts of rework, I dont charge. Repeated and ongoing OT i charge but Im just talking about straight time pay. Salaried employees just get straight time not time and a half for over 40 hrs anyway.

Is that what is being talked about? Time and a half? I guess Im not used to that bc everywhere Ive worked since college has been straight time OT for salaried folks.

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For example at A&M, salaried folks received nothing for extra work. Grad students were impacted tremendously by this. Many were salaried but worked 50-60 hours a week without extra compensation.

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State (and thus A&M) usually has salaried-exempt and salaried-non-exempt. Salaried non exempt are employees not exempt from OT pay and thus got "comp time". You get hours off according to your OT work. Got complicated because there were state OT rules and Fed OT rules, so under some situations comp time is time and a half, and in other situations comp time is straight time. There were also rules on carry over and having to use the comp time within 12 months.

Grad students are interesting because at least some amount of time is actually "taking a class". IIRC, a typical grad student is registered for 9 hrs, with a number of those being a "research class" for their advisor. Applying the typical 3hrs of class time per registered hour per week, ~27 hrs per week is actually a class the grad student taking.

Of course, grad students are treated as employees only when convenient. When I was there, we had health insurance but not sick days and vacation days or a retirement plan. My time as a grad student also didn't count as time as a state employee which have increased the accrual rate of sick/vacation hours as a state employee later.

I don't know what this employee does for the company, but I will give a brief explanation of the overtime rules.

• The number of employees employed by the company is irrelevant to whether an employer is legally required to pay overtime.
• It is a common misconception that paying an employee a salary automatically exempts the employee from OT. This is not true.

There is a two-part test to determine whether an employee is exempt from OT:

1) A duties test: Basically this means you have to look at the job duties the employee actually performs on the job. The FLSA exempts certain individuals from OT based upon these duties; AND

2) A salary test: the employee must be paid a minimum threshold salary. As of right now, an employee must be paid $455 per week to qualify as exempt. A federal court blocked the increased salary threshold implemented under the Obama Administration; however, depending on the appeals process, the increase may be implemented in the future.

For an employee to be exempt from OT, the employee must meet both the duties test AND the salary test.

Hope this helps!