A $47,476 pay threshold will likely affect a huge percentage of fresh college graduates starting their first job.
http://money.cnn.com/2016/05/17/pf/overtime-pay-rule-change-final/
The impact on higher ed staff:
https://www.insidehighered.com/news/2016/05/18/obama-administration-releases-final-rules-overtime-pay-including-some-exemptions
That is interesting, I always thought that exempt meant you were in a white collar/managerial position and were not paid by the hour, I didn’t realize it had an income level as well. Must have been pretty low when I started working, I made very little even for the times, and worked 50,60 hour weeks almost every week.
I don’t have time to look up base pay tables but I’m curious what that does to the military. I expect the answer is that the military is exempt from the law. 12 hours per day, seven days per week is standard working hours on deployment. I expect that E-6 and above will be over the limit but I seriously doubt an unmarried junior enlisted will be over the limit.
I read somewhere that this will affect colleges with junior professors or even research assistants who are expected to log massive research hours to get published as required for advancement.
Higher ed will be affected at the administrative level, particularly in admissions. Staff is relatively low paid and works very long hours at certain times of the year. It’s not just admissions, though … many administrative staff workers are salaried but expected to perform work that requires more than 40 hours to complete … and they are paid below the new threshold. Of course, if a salaried, at-will staff member who should get paid overtime is not paid overtime, I don’t know whether that person will make waves.
My second will get caught in this. The difference is at the point where I think they will probably give him a raise
Yah, I imagine a lot of people are going to suddenly get a raise to $47,477.
There are always those who find ways around policies and regulations. The raise seems like a likely one.
The Key Provisions of the Final Rule:
Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker);
Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004); and
Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.
This deals with an age old problem. I remember my first job at a big bank, 35 years ago, a woman I worked with was a very motivated, competent, ambitious “clerk”. When she was promoted to “Assistant Vice President” she told me she would actually be taking home less money because she would no longer be eligible for overtime. She had been working, and expected to continue working, long hours.
I am waiting to see how this works out for k-12 teachers. Most in our region make less than 47K, and many work more than 40 hours. I imagine the school will say that working at home on nights/weekends does not count. Another factor is that they are really not 12 month employees, so I guess the $913 number is more significant.
This is going to hurt a lot of people.
And help a lot of people. I just talked to a friend who works at a company notorious for exploiting its white collar workers. They’re ecstatic. Of course, being realistic they know their blood-sucking CEO will find ways to go around the regulation, and it’ll be back to 55 hour weeks at 40 hour week pay. But for now, they know said blood-sucking CEO is really pi**ed off. And that makes them smile.
I’m really happy about #3 in post #7. Automatic updates!
I believe schools are exempt. This will be a pain in the neck for business who now have to track actual hours and keep records. They suggest tracking by the minute. I have account managers out on the road. Some weeks they work 38 some 42 but it works out in the wash. The unscrupulous ones will figure out how to exploit this.
We also have to redo policy manuals, we have to buy hour tracking apps or time clocks and administrative time keeping up with this increases.
Teacher here.
My pay was calculated on the required in school work hours per week, not the work I did at home. My work week was 38 hours a week. If I took a couple of hours off without pay…I lost 1/38 of the weeks’ salary.
I don’t think this will even be on the radar screen in education…because teachers have NEVER been eligible for overtime based on work done at home. Not ever.
I wonder what will happen in higher ed if certain low level admins have to be given raises to avoid overtime. Will all same-level admins (for instance, coaches, admissions, housing, student activities) get the raise? And then, will new teaching staff be upset because somebody with a lot less education is getting paid more just because they don’t teach?
I can see universities playing with numbers. For example, increasing the value of the on-campus apartment for the housing personnel so that their total compensation exceeds the threshold.
I’m making a few times more than the new amount and we get paid overtime (at 1x, capped at a lower hourly rate). A few years ago our management decided to NOT hire contractors or outsource the part we were working on and decided to pay overtime to all staff on the technical track. OT was further capped to 20 hours a week.
It worked VERY well, mostly because nobody went cuckoo from 80 hours, and because the extra time allowed us to test a lot more (consumer electronics) as developers/designers, rather than wait for QC to test and then argue. The result was the highest quality product we’ve ever shipped.
The tradition stuck and now we’re still getting paid OT. Not a LOT of money, but not bad either, I usually work 12-16 hours a week extra, a few hours in the evening and one full day on the weekend. Work is from home mostly.
There will be a reduction in hours and job cuts.
I’d wonder about positions that “have” to be classified as salaried, as opposed to those that “could” be classified as salary-based. My understanding (which could be 100% wrong) is that certain positions are allowed to be classified as salary, but fewer positions are required to be classified that way.
So long as lower paying positions are not required to be salaried, I suspect what we may find is that the salaried workers are rehired as hourly, and even possibly part time, employees. Even if that requires additional hiring, the savings in benefits for having multiple part-time shift managers could well offset the requirements of benefits + OT for full-time folks with some ‘managerial responsibilities’ that are suddenly OT-eligible.
I am very happy about this. My son is a manager in a hotel. He is scheduled for 45+/- hours per week. No complaints. It’s the unscheduled shifts that he has to take – when an hourly person doesn’t show up. The owners don’t have to pay the no-show, and they don’t have to pay the assistant manager to take the hours because, gee, he’s a manager. It’s about time he got compensated for taking those extra shifts.