the new overtime pay rules are here — if you earn less than $47,476, read this

The new overtime rules that we’ve been talking about here for the last month were finally released by the Department of Labor today. This is no longer speculation; these rules are now final and will go into effect on December 1.

The changes will require an additional 4.2 million American workers to be paid overtime if they work more than 40 hours in a week.

Specifics on the new rules:

  • Employers must pay overtime (time and a half) for work beyond 40 hours in a week to all workers earning up to $913 per week or $47,476 annually.
  • Up to 10% of the salary level used to make the calculation can come from non-discretionary bonuses, incentive payment, and commissions. (Previously, there’s been no provision to count those.)
  • The salary and compensation levels will be updated every three years, to meet the 40th percentile of full-time salaried workers in the lowest-wage Census region (currently the South).
  • No changes were made to the “duties test” to determine exemption.

So, what does this mean for you?

If you currently earn $47,476 or more: This doesn’t change anything for you.

If you currently earn less than $47,476 and are currently classified as non-exempt (meaning you’ve been legally required to get overtime pay all along): This doesn’t change anything for you.

If you currently earn less than $47,476 and are exempt (meaning you previously haven’t been subject to overtime laws): You’re in the group impacted by this. You will now be required to receive overtime pay (time and a half) for any hours over 40 that you work in a week. You will also be required to start tracking your hours, including things like logging into your work email from home. In addition, you may see some or all of the following from your employer:

  • Your employer may limit you from working overtime (in order to avoid new costs of paying for that overtime).
  • If you regularly work more than 40 hours a week, your employer might choose to reduce your base hourly wage to account for the overtime pay you’ll need to receive, in order to ensure that your overall annual compensation stays about where it is now.
  • If you’re used to having flexibility in your schedule, that might change, depending on how your employer handles this. For example, let’s say that currently your employer lets you work 50 hours this week, 35 hours next week and 40 hours the following week, trusting you to simply get the job done without scrutinizing your hours. Under the new rule, that will probably be much harder to do, since those hours over 40 will now cost your employer more.
  • If you’re pretty close to the $47,476 threshold and/or you work significant amounts of overtime, your employer may raise your salary to meet it in order to keep you exempt. If that happens, nothing else in the list above should apply to you.

{ 730 comments… read them below }

  1. Nervous Accountant

    I’m not sure how to feel about this, I’m more worried about the negative consequences (staff getting laid off/let go to avoid getting paid the OT). I’m a tax accountant, so we regularly work 55+ for 12-13 weeks per year. I wonder how this would affect us who regularly do OT during a specific period.

    1. misspiggy

      I can’t see layoffs happening in situations like yours, because how would the work get done? It’s possible that employers would bring on more contract workers for busy times, but only if the cost were substantially less than paying you and your colleagues overtime for the busy period.

      Fees to clients might go up, or ways to make processes more efficient and save time might be prioritised. If some employees are much slower than others and thus work longer hours, I suppose they could be in line for replacement.

      1. De Minimis

        In bigger firms most people are replaced after a couple of years. The firm makes more money off brand new hires than they do people with experience. My guess is that this would just accelerate the churning process, though I think most larger markets would already be over the threshold to where this wouldn’t affect them.

        I’m curious what the effect it would have on smaller firms–I know when I was looking in a small market years ago entry level salaries were 40k at most, and I doubt much has changed. But at the time it seemed fairly common for smaller firms to pay overtime during busy season, so more may just go in that direction.

        1. De Minimis

          It looks like accountants are exempt from the rules…but I know there have already been overtime lawsuits against the bigger firms from entry level employees. Personally, I think they should be non-exempt, their duties at that point are mostly clerical in nature. From what I can tell, you usually have to be there at least a year or two before you really start utilizing any kind of professional knowledge.

            1. De Minimis

              I was reading the link and they were originally included with lawyers, doctors, and teachers…has that changed?

              You must be right, though, because apparently the AICPA is really negative about the new rules…

                1. De Minimis

                  You can really see why the public accounting overtime lawsuits went back and forth so much over this…if a first-year associate is making copies and entering data into a spreadsheet or tax software, and checking data that is also reviewed by other people, is that considered to be using professional knowledge? I think the courts ultimately said yes, but on appeal…

          1. Kristie Cox

            My sister has worked at a plant for 22 years and Is the only female supervisor. She has been on salary for years and they told her that they are bumping a guy who has been there three years up to meet the legal salary amount and are putting her back on hourly rates. Is this legal? They said she had to make a certain amount to be on salary.

    2. Mike C.

      I have a hard time seeing significant amounts of layoffs – companies still have to meet the demands of their customers.

    3. Allison Mary

      I’m with misspiggy – I have a job with a public accounting firm lined up for this fall, and my base salary is just barely below the new threshold. I’m sure that my firm will simply bump it up a bit to meet the new threshold. And unless the average salaries at YOUR employer are significantly below this threshold, I’d imagine your employer will probably do the same.

    4. Chameleon

      This is the same kind of scaremongering that happens every time the minimum wage goes up. Will there be some short-term pain? Sure, sadly some people may get laid off, or lose hours. Until the businesses realize why they had people in those hours to begin with, at which point it will even out–with employees either making more money, or having less work. If a business can’t manage that, it shouldn’t be in business.

      Honestly, the hand-wringing about how businesses are no longer able to exploit workers while paying them pittances drives me crazy. There is no reason why anyone making barely above minimum wage should be working more than 40 hours a week without additional compensation.

      1. it will happen

        Well there is the opposite too – my employees that will be impacted by this NEVER work over 40 hours and currently have the flexibility being exempt – basically having appointments, coming in at flexible times that work for them because of children etc. This now looks like they basically are exempt but changing to hourly and needing to track their time completely. This means they will basically need to clock in and out and manage their lunch hours etc and make sure they get their 40 hours in. They aren’t going to lose out – they weren’t getting overtime before and I wasn’t having them work more than 40 – lots of times they worked less but were paid for it – now they will be paid exactly what they work correct?

        1. Ask a Manager Post author

          No, you can still choose to pay them for 40 hours even if they work less (so continuing to do what you’re doing now). You just need to make sure they if they work more than 40, you’re tracking and paying it.

        2. Zillah

          While they would need to track their hours now, you can have flexibility for people who aren’t exempt – being non-exempt doesn’t automatically mean a 9-6 schedule. I’ve never been exempt, but most jobs I’ve had have had very flexible start times and working a little less one day to go to an appointment and making it up elsewhere in the week has never been a problem.

          1. Not the Droid You are Looking For

            Several of my coworkers are salaried non-exempt. They are still allowed the same flexibility in their schedule (though there are some strict rules around lunch time meetings), the only thing is that they absolutely cannot go over 40 hours, including checking their email from home.

        3. Wobber

          Or they change the work week and base it off of 50 hours which happened to me. So now I’m taking a 7% pay cut because I only work 45 which is over the 40 week but under the 50.

      2. Nervous Accountant

        Uhhhhhhh losing my job in a layoff isn’t short term pain…condescending much?

        1. Noble

          She meant short-term pain on a macro level. On a micro-level, yes layoffs are not easy to deal with but I also wouldn’t worry myself for the next several months that THAT is going to be the final outcome. And I think the purpose of this post was to point out that its a good time to raise concerns with your management/HR regarding this. At the end of the day (or the end of this year rather) you might find your pay increased, either through your base salary OR through OT pay, wouldn’t that be nice?

          But as the nation gets used to these new laws there will be some bumps in the road and confusion/panic as is happening now, thus the “short term pain” because eventually things will even out, as they always do.

    5. KMan

      I was given 30 days notice today (layoff) because of this law going to effect starting Dec 1st. I have been working there since March, and now I’m being faced with a cut in pay by switching from salary to hourly @ less than 40 hours per week.

      From $40k/year salary to looking for a new job.

      How many people will lose their jobs and/or lose income because of this law? It’ll be the employers squeezing it out of their employees, rather than whatever the hell the gov’t was thinking.

      1. Taxman

        Sorry to hear about your situation KMan. I’m probably going to be in the same boat soon. I work at a CPA firm as and work long hours during tax season. At a $40k/year salary I don’t see a bump up the threshold or OT pay coming my way. Plus my boss has been completely avoiding the subject around me. I’ll probably have my wage reduced or benefits cuts. Employers are not going to eat the additional cost. They will get it out of the employees one way or another. Government screwing us again!

        1. CMan

          Depends where you work. I work as a software technician and the company I work for decided to bump everyone up who made less than that.

    6. Scott

      I currently work 53 hours a week. If they can just adjust my base rate down to compensate for the overtime they force me to work what good does any of this do? Seems pretty pointless to me. In fact it may just cause undue animosity between workers who have long felt overused on the salary system, now make less money if the boss decides to send you home early.

  2. Bowserkitty

    Damn, I just read this on NPR and had to send it to my unofficial financial advisor/best friend to see if I was reading things right, because I’m in the group affected.

    At first thought I’m a little happy, but I’ve gotten really used to not having to clock in at all for the past several months. Worse, what Nervous Accountant said about potential layoffs….

    1. Bowserkitty

      BAWWWW now I’m having a stupid little anxiety attack! I have to reassure myself I’m working for a better employer than I used to and stop freaking out over something this far in the future.

    2. Student

      At worst, it’s going to mean you have a much more accurate picture of what you’re worth to your employer, and any new jobs you apply for will give you a more accurate idea of what to expect. It’s going to be painful through the transition, but once it’s done it means a lot more transparency for everyone involved on what a job actually requires and how much your time is worth. It might not mean your time is worth more, but it means you are now getting the real price tag attached to it instead of a price tag with a bunch of asterisks to fine print.

      1. MaggiePi

        Yes! Instead of $X salary and “oh, by the way, we need to to work 70 hours instead of 40-50 like we said,” it will be much clearer what you will get for what you work.

      2. Bowserkitty

        That’s a great way to look at it! Come to think of it I’m not expected to be here more than 40 hours a week anyway, but as I mentioned below, event planning is part of my duties and right now I’m neck-deep in it because they’re all happening next month, so this sort of OT is on my brain’s forefront more than normal.

    3. phedre

      If you’re close to the $47K level, I wouldn’t be surprised if your employer just bumped you up to that level to avoid overtime completely.

      Do you consistently work more than 40 hours a week now? Is that a general expectation of your employer?

      Honestly, if you have a reasonable employer I really wouldn’t worry too much.

      1. Bowserkitty

        I don’t, but I will likely be working extra hours next month because I’m something of an event planner (approximately 3x a year) and these events happen all in one month this year.

        I’m also $10k behind that level, so I highly doubt I’ll get a double digit percentage raise. (Pipe dreams!)

        1. phedre

          Hah yeah, unfortunately they probably wouldn’t raise you that much.

          But they would probably be willing to structure your hours so that you can have limited overtime during that one month. It’s not like every week of the year you’d have overtime – it would just be a really defined amount of OT during that month.

          Once your employer has time to think/process these new rules, you can always sit down and talk with them (as long as they’re reasonable). Like, “during this month, I usually average X hours of overtime because I need to do _____ for these events.” And see if you can get the OT approved during the period.

          If they can’t do that for budgetary reasons it’s totally fair to politely say “I can realistically accomplish _____ in 40 hours a week” and see how they want you to adjust. A reasonable employer will either 1) allow you to get overtime during that period or 2) adjust your workload so you don’t have to get OT.

        2. Elizabeth West

          Me too (close), so I don’t expect I’ll get a bump either. Other than our usual merit raise (if I get that) in the autumn. It will likely be no overtime, and my boss has already said something to that effect when I asked her about a project someone needed me on.

        3. trphilli

          Your employer is going to make a call. Based on 3 events at 12 hours each: would reduce your weekly paycheck ~$20 per week in non OT weeks or pay you $1,000 of OT over the year.

      2. Janice Weaver

        I am so call salary i work more than 40 hours a week and do not get paid overtime. I am only salary when i work every day. I am hourly if i take time off. I am very confuse. Since the law will be going in place i was told any work consist of overtime the owner will do so they will not have to comply to the new law. So i will work 40 hours but have to clean up what she does in my 40 hours. I been working for several years without time in a half. I notice on my pay it went from salary to hourly still not getting time in a half. What can i do. I was told i can quit if i do not like their new rules verses the government rule. I see it like this they still want me to do the same amount of work in less the hours.

        1. Noble

          This is confusing?? Either you are salary or you are hourly, I don’t think it can be either or depending on how your employer feels for the week. But yes, if they keep you at 40 hours, regardless of pay structure then this doesn’t affect you. But if you are making less than the new minimum and are asked to work anything north of 40 then they must pay you OT…I believe.

          Is that legal, Alison? Anyone?

        2. Ask a Manager Post author

          I’m not sure I understand the question, but it sounds like once the new law goes into effect, they’re going to keep you to 40 hours so you don’t work any overtime? If so, that’s definitely legal.

      3. Jerry Kid

        Restaurant industry will get torn up…nobody there will get raises, all assistant managers will have their pay cut along with their hours, and new employees will be added at the new discount price. This may work for many industries, but i fear that the service industry is about to take a big hit, and with it, the service we’ve all become accustom to.

        1. Kira

          But aren’t servers already non-exempt? I’m not familiar, but it really doesn’t seem like waiting tables is the kind of work that would qualify for an overtime exemption.

    4. Frank

      What about the businesses that currently don’t have to pay overtime because they’re ‘entertainment’ ? Movie theaters, amusement parks, etc.

    5. AliceBD

      I’m happy for lots of my friends, but I’m not happy about it for my personal situation. I make $5k less than the threshold, so there’s no way they’ll bump me up. They also won’t approve overtime either, as we’re slashing budgets left and right.

      I manage social media so I always have to do some stuff from home — for example, Instagram’s TOS and API don’t let you schedule posts, so I manually post from home daily in the evening, because we get better engagement in the evening. I probably work 45+ hours in a normal week, because I end up getting engrossed in what I’m doing and stay late, or get bored during lunch (it does not take an hour to eat a sandwich in the break room) and take a shorter lunch.

      There’s not an expectation for us to work more than 40 hours a week, but I have fun at my job and large parts of it are things I would do voluntarily anyway.

      I also have frequent doctor’s appointments for chronic medical conditions. On those days I currently just skip lunch and stay late to make up the time, but I don’t track it and I tend to stay later than necessary for just making up the time. I’m really not looking forward to having to track my hours like I am a teenager again.

      So all this will give me is “free time” I don’t want or need.

      1. Kira

        Tracking your hours, and making sure you get your work done in 40 hours or less, doesn’t seem like that big a deal. From what you describe, you’re adding on the extra hours yourself so it should be easy to just… stop doing that.

        I’m in a similar boat to you–I work about 45 hours a week, but some of it is doing work I think should get done, not work that my boss told me to do or is aware of. If I become non-exempt and need to stick to 40 hours, then that’s the bullet I’ll bite.

    6. shellbell

      I manage a team of non-exempt salaried workers. They still have flexible schedules. They don’t “clock” in, but they just keep track of their hours on their own and log any overtime so they get time and half. It’s fine.

  3. RG

    I’m with Nervous Accountant. I feel like this won’t be great for people under the threshold that are exempt, since quite a few employers will cut your hours or reduce base salary.

    1. misspiggy

      How would that be a problem, though? Either you’re in the same position as you were before, or you have the same money and more free time.

      1. MaggiePi

        Some employers may limit workers to 40 hours and also cut the base pay to cover the cost of hiring and paying someone else for the extra hours the first employee used to work. This means some employees may have more free time but (much) less money. The free time is great, if you can afford it.
        I see there is a lot of good in this too, as many places created piles of “managers” so they could work them 60-80 hours and pay them less than minimum wage really, but it also may be a loss for some.

        1. INFJ

          That’s the first benefit I thought of: for all the underpaid and overworked exempt managers. (I’ve seen the type of scenario you describe at several different jobs.)

        2. Jacey

          Ugh, that happened to my mother. She worked for a state-funded group home program for teens in the system and they were severely understaffed. She was working too many hours to try to keep up with all the required work so they made her a manager so she lost all that overtime pay but still had to do all the work. Such a sucky situation. I’m really hoping this law will help her out.

          1. MaggiePi

            Yep, I know of too many places where getting a “promotion” was terrible because you became exempt and had to work 60+ hours for really less money per hour than before. Of course, in order to move above and beyond that, you had to be a “manager” first. So you either had to decide to do it for 2-4 years and “invest in your future,” stay hourly and never advance, or get a new job.

          2. Noble

            This, unfortunately seems to be a norm for this particular industry. It’s so underpaid as it is, and really should be paid better to begin with. My cousin was doing the same thing, under the title manager. She was working her full 40, plus covering for absences plus being on-call 24/7 and ended up putting in TONS of overtime. Her salary was barely $25,000. It was ridiculous. A law like this would have benefited her greatly in that position. Because she enjoyed the population she served and having the title she did, but she was tired and grossly underpaid for her efforts and commitment.

        3. Jinx

          My husband recently quit a retail job that did something like that. That one store had a bunch of managers who worked a lot of overtime, to the point where they were pressured into using PTO while on the clock (seriously). I’m curious what effect this will have on them.

        4. Retail employee

          Most of the managers where I work are exempt (like certain “entry-level manager” jobs are still hourly and non-exempt, but most department managers are). I don’t know what they make in relation to the new threshold, but if it’s under that threshold, this is gonna hurt. The company keeps a pretty tight rein on overtime and is a definite stickler about nobody working off the clock (yay for them!), but salaried managers easily work 10-12 hour days during holiday busy season, but can get by with 6-hour days during the summer. With the new laws, they’d be stuck working 8-hour days when there’s less work and trying to get more work done or deal with more overtime then we ever had, which, honestly, is going to be tight on the department budgets – the profit margin is slim in the grocery industry.

          1. Kira

            The “8-hour days when there’s less work” part doesn’t have to happen–they could still be paid salary. But you’re right about the busy season–if they want to keep the same staffing levels they’ll need to pay overtime (extra $) or bring on extra staff (extra $).

      2. Lee

        “Either you’re in the same position as you were before, or you have the same money and more free time.”

        That’s what the DOL faceless cartoon animation videos are spouting out on the DOL website, but it may not be true for a lot of employees. In fact, the DOL is acting clueless/ignorant as to any negative consequences of their new overtime rule. This new rule is specifically targeted to help low-wage workers with a family of 4, who frequently work 50-60 hours weeks. Not everyone meets this standard or will benefit from it.

        1. Yuppie

          What does a family of four have to do with it? It also helps many single young professionals whose employers believe they can squeeze the life and productivity out of them by dishing out 60+ hour work loads.

    2. Kimberlee, Esq

      I would be *astounded* if large numbers of people saw a pay cut because of this. Employers might slow hiring, but you can’t expect to actually cut someone’s pay and then retain them for more than a couple months. Unemployment is close to pre-recession levels, employers would need to be willing to pay for a lot of churn to reduce the overall pay of their workforce.

      Here’s what’ll happen: companies will figure out where they *need* to pay overtime and pay it. They will restrict hours to 40 in all other cases. There will be a lot of people trying to work invisible overtime, which will lead to a spike in wage theft suits. And then things will equalize again as employers figure out that they can, indeed, afford to pay for this.

      1. Ask a Manager Post author

        They’ll cut hourly wage, not total pay. In other words, they’ll cut the hourly wage to account for the overtime they need to pay so your overall pay remains about the same and you won’t see much/any difference in your final paycheck or your hours. Most of the time — who knows what will happen down the road if all that overtime isn’t needed.

        1. Justin

          Eh, sounds like a “manager scare tactic.” Managers say these things every time they get told they can’t exploit people anymore.

          1. Ask a Manager Post author

            Er, no. This is actually a thing that will happen. It’s not a scare tactic; it’s going to make logical sense for some businesses and some roles. It’s not terribly scary — it means the person will keep getting the same amount of pay they’re currently getting — so it fails as a scare tactic.

            1. Justin

              But they’re working overtime with no extra pay. Sounds like one of those “well I’ll be forced to cut back because the law is unfair.” You hear it every time these new laws come up.

              1. Kira

                Justin, let me try to lay out the situation a little differently.

                Now: Employee gets $10/hr, works 50hrs/wk. There’s no overtime, so they get paid $500/wk.

                Possible future: Employee continues to work 50hrs/wk. Employer reduces the salary down to $9.09/hr. Now the employee gets paid regular rates for the first 40 hours (40 x $9.09 = $363.60) and time and a half for the 10 overtime hours (10 x (1.5 x $9.09) = $136.35) for a total paycheck of $499.95.

                Both weeks, the employee works 50 hours and the employer pays $500. The end result is no different. But! The employee will be better able to compare pay at two different employers, since the hidden overtime in the current system will be out in the open.

            2. Bp

              What are the odds this continues to implementation thru the new administration. Maybe we get 1 month and 9 days and then it gets repealed? Or is this on more solid ground than that?

    3. Lorraine C

      Don’t be nervous. Things have a way of working themselves out. My partner is accountant and exempt and for 7 years he was expected to work 50 + hours a week, with not a dime in overtime pay. ( I think the confusion comes because your employer never says flat out you will need to work 12 hour days but anyone with a brain in their head can see that their workload could not possibly be completed in a 8 hour day. It’s all the unspoken , covert exploration that makes me angry. ) This month his employer has now increased his pay from $47,756.00 to $55,103. I feel bad that everyone is so upset by the new rules but common sense would tell me that getting paid for hours worked can only be a good thing. I keep reading post from people who are not in situations where they are excepted to work over 40 hours. Well this is my example of a good person who works nights and weekends with out compensation and his employer has done the right thing with the help of our government,

      1. Lorraine C

        * correction his pay was increased from $37, 756 to $55,103.00 and he is not an entry level accountant he is also highly intelligent and hard working person who was expected to do the job on less then $40 K and we struggled. This is the example that the government is trying to correct.

        1. Steve South

          Did they explicitly, in writing say that he will be expected to work more than 40 hours a week now? If not what is to prevent you from complaining that they are now working him more than he should be working? Will you be complaining a year from now as they will be working him 60+ hours a week to make up for the extra money he is being paid

          If he is smart enough to be an accountant, he is smart enough to read the rules and know that the only reason a business gives someone a salary is to work them more than 40 hours. There is no other reason! Otherwise pay them hourly as it is cheaper when someone is working 40 or under hours a week.

          1. Lorraine C

            personally my boyfriend is not a complainer. I have never once in the 8 years that we have been dating heard him complain about the hours that he works that is why in my personal scenario I always felt really bad for him. He is driven and a hard worker and should be compensated for the value that he is adding to his firm.

            please let me know if you have any additional questions.

  4. ack ack

    Why is cutting people’s hours a bad thing? If people are being paid low salaries, they shouldn’t have to work overtime. I just can’t understand why people see this as a bad thing. The system was being abused by a lot of employers.

    1. LBK

      Because the expectations for what you can get done aren’t likely to scale down accordingly. I suspect people who will be cut down from a 50-hour week to a 40-hour week are going to be expected to produce the same amount and quality of work with no additional staffing.

      1. esra

        I’d think after the extinction burst for that, company expectations will have to adjust. Honestly, making under 45k on salary is garbagetown.

        1. i'm anon

          Yes, it will be a rough adjustment period but companies are just going to have to either adjust their expectations or provide better time-saving and productivity tools so that employees can get more done in fewer hours.

        2. fposte

          It’s not in a lot of places, though–you can buy a house and raise kids on that where I live.

          1. esra

            I am, admittedly, living in Toronto, land of obscene rent and impossible housing prices. I still can’t imagine someone making 28k and working 50+ hours a week is getting a solid deal though.

            1. Murphy

              Right?! I’m in Alberta, land of slightly less obscene rent and housing prices – but still obscene compared to a lot of the US, but $28K is a poverty wage. Working 50+ hours for that privilege? Crappy.

              1. phedre

                Yeah, I’m in Seattle and my husband is a line cook and makes $15/hr. He would NEVER be able to live on his own in this city if he wasn’t married to me. Housing costs are just way too expensive here.

          2. Ms. Didymus

            I live in a not very expensive mid sized city and…I can live off $45k but only because I’m a single person. If I had a spouse and kids? Not so much.

          3. Kittens Mcghee

            I read that as raising a house and buying kids on that where I live. LOL. Too much overtime.

        3. Meg Murry

          It totally depends what part of the country you are in though. In my low cost of living area, entry level wages are often in the 35k to 50k range, so they are in the bubble where the employer will have to decide whether to make the position hourly and pay OT or to bump the starting salary up over the threshold.

          I fear that there will be a combo of:
          -Pressure to make the salaried employees pick up the difference when the company doesn’t want to pay the hourly workers OT
          -Compression at the bottom end of the pay scale that causes resentment (entry level worker now makes $48K and person with 5+ years experience is only at $50k)
          -Additional pressure on employees to work off the clock

          However, maybe there will be an expansion of salaried non-exempt positions (these do exist, but aren’t common) where employees are generally treated as salaried in that they get the same base pay every week, but if they work OT they will get paid time and a half for it (and it was usually based on a paper time sheet, not a strict clocking in and out). I’ve worked a few places that offered this for jobs where there was only seasonal or emergency OT expected.

          Although in general, I think this is probably a case where there will be a bigger separation between the good companies that treat their employees well and the bad ones that treat employees crappily – and the crappy ones were the ones more likely to have people on the bottom end of the salary scale that will be effected most by this – assuming they aren’t so crappy that they don’t make a change, either out of ignorance or “let’s see how long we can get away with this”

          1. LBK

            However, maybe there will be an expansion of salaried non-exempt positions (these do exist, but aren’t common) where employees are generally treated as salaried in that they get the same base pay every week, but if they work OT they will get paid time and a half for it (and it was usually based on a paper time sheet, not a strict clocking in and out). I’ve worked a few places that offered this for jobs where there was only seasonal or emergency OT expected.

            I think this is actually not uncommon at all if people are being correctly categorized; I’d say the vast majority of entry-level office jobs fit this description, but people are either being illegally treated as exempt or they just don’t even realize that they’re legally entitled to overtime because they don’t understand that salaried and hourly aren’t legally relevant definitions when it comes to OT pay.

            1. Meg Murry

              And in fact, it is recommended that way in the final ruling (this is from the pdf titled “Overtime Final Rule and the Non-Profit Sector” – but this section seems applicable to the for-profit sector as well:

              Pay overtime above a salary: Employers also can continue to pay newly overtime-eligible employees a salary and pay overtime for hours in excess of 40 per week. The law does not require that newly overtime eligible workers be converted to hourly pay status.
              This approach works for employees who usually work 40 hours or fewer, but have seasonal or occasional spikes that require overtime for which employers can plan and budget the extra pay during those periods.
              o For an employee who works a fixed schedule that rarely varies, the employer may simply keep a
              record of the schedule and indicate the number of hours the worker actually worked only when the
              worker varies from the schedule.
              o For an employee with a flexible schedule, an employer does not need to require an employee
              to sign in each time she starts and stops work. The employer must keep an accurate record of the number of daily hours worked by the employee. So an employer could allow an employee to just
              provide the total number of hours she worked each day, including the number of overtime hours,
              by the end of each pay period.

              1. fposte

                Interesting. I wonder if that’s what will happen to the part-timers.

                That’s going to be a decision made at a much higher level than mine, though.

              2. Megs

                I worked a job that functioned like this, and other than the fact that we weren’t eligible for overtime AT ALL because of working for the state, it worked pretty well.

        4. LBK

          I guess I’m skeptical that that will hold true, if only because the trend in the modern workplace has been trying to do more with less and this is just one more thing that will reinforce the practicality of that sentiment to many employers. I don’t decry that trend per se because I think it makes sense from a business perspective (why pay more people more money if you could get the same result with fewer people for less money?), but I struggle to believe that this will be the tipping point and that businesses will be forced into re-evaluating how they do things once this ruling goes into place.

          Frankly, a big part of this stems from how little most people understand overtime laws. I’d never even heard the terms exempt/non-exempt until I started reading AAM other than seeing it on my offer letter at my current job and glossing over it because I didn’t know what it meant. I think the exact people targeted by this change – the lower end of the pay scale in white collar professions – are the main ones who don’t realize that they may even be owed overtime right now because either a) they’re being incorrectly categorized as exempt without realizing it, or b) they think that being salaried means they don’t get overtime, so they don’t think to ask about it.

          I think so many people just think of it as hourly vs salaried and only associate overtime with the former, without realizing that a salaried employee can still be legally owed overtime. I’m skeptical that the majority of the populace and particularly those affected by this law will even understand what this change means to the point that they’ll ensure their employer is complying with it properly, because I don’t think most people do that now. I’d have liked the DOL to preface this change with a massive education campaign about overtime laws; hopefully some of that education will come now through media attention about the change in the law, but I’m hesitant at best.

          1. Observer

            I think that this is something that will actually put the brakes on the more unreasonable aspects of the do more with less trend. One of the things that’s been happening was the idea that we can do more with fewer staff. S\Everyone understood that it took more hours for the staff in question, but for many employers it really didn’t seem like a big deal – just classify the person as exempt, and you can make them stretch their duties. But, you can’t do that any more. And, because of the publicity this has had, it’s going to be very hard for employers to claim that they were not aware of the law, except at the fringes. AND many more employees are aware of the laws, for the same reason.

            It’s not going to change everything, and it won’t come easy, but even the stupidest employer will understand that you can’t expect people to be able to do 50-60 hours of work in 40, and expecting THAT much overtime “off the clock” is asking for trouble.

            1. LBK

              That’s fair. I would certainly be happy to be proven wrong and to see this actually create a change in our culture; I think laws like this are the ones that really do affect the income inequality that’s been much discussed as of late in the political sphere, so I’m glad to see actual, practical solutions being implemented instead of just rhetoric being bandied about.

              I still wish the DOL would spend more time and money on education and streamlining the claims process. I’d love for there to even be some kind of easy, quick service where you could submit a description of your job and responsibilities and have someone get back to you within a few days to give a general, non-binding assessment of whether you sound like you should be exempt or non-exempt, that way you’d have a baseline understanding of whether it might be worth pursuing a formal claim. Having something similar for the EEOC would be wonderful as well.

              Right now I think people rely on websites like AAM and other employment-related forums for this kind of gut check, and I’d love it if the institutions that are supposed to protect these rights took on a more involved role in not just making laws and processing claims, but in shaping the culture around understanding what’s illegal and creating an environment of accountability that will make companies pre-emptively address these issues.

        5. Oryx

          Not everywhere. That’s $8K more than I currently make and I live very, very comfortably.

        6. Creag an Tuire

          The best part of this rule, IMO, is the indexing to inflation — if we’d done -that- in the first place we wouldn’t have to worry about so many companies scrambling to do more with much less like headless chickens.

          As it is, I look at this like a much-delayed medical procedure — we should’ve done it a while ago and the recovery will only suck that much more the more we put it off.

        7. jaxon

          It may be garbagetown but it’s the situation of lots and lots and lots of people. My very first job out of college paid $35K in NYC and I had to work TONS of overtime.

          1. esra

            Yes… which is why I heartily endorse this change. That’s not just on America, either. Canada is also lagging behind in wages. There’s no reason for it. The money is there.

      2. Student

        Ultimately, people in those situations will now be able to move on to a job where the actual value is more accurately reflected by the wage than it currently is, or they’ll be able to pick up second jobs int heir free time to make up the money. They’re already effectively working a second part-time job now, but not getting paid to do so.

    2. Marie

      Exactly, it’s less “cutting hours” and more “no longer requiring employees to work for free.” Employees will still get the salary they were getting, but no longer have to stretch it across 60 hours instead of 40.

      1. MaggiePi

        Sometimes. But there’s no guarantee they will still get the salary they are getting. They could easily earn 67% of their salary for working 67% of their previous hours and be forbidden to work overtime.
        This may mean the company hires a part-timer to take the other hours (or one FT for every two FT they had, or something).
        Or it could mean, as LBK said, they just expect you to do it all in 40 hours anyway (depending of the work/industry). Even if you get all the same amount of work done in 40 hours, employees are not guaranteed to make what they made when they worked 60 hours.
        I expect in 2017 we’ll see a lot of people shifting jobs. Not necessarily because the new job is even “better” but because many people will feel burned one way or another by their employer no matter how they handle it. (Even those like Lauren Hopkins below, who are near threshold and may get a raise but then feel undervalued because other employees also got raised up to the same point.)

        1. Victoria Nonprofit (USA)

          Sure, and then they can leave. If my boss asked me to take a 33% pay cut, I’d decline and get a job elsewhere.

          Obviously it’s not as easy as all that, but if this is happening across the economy then the economy will have to change. Good riddance.

          1. MaggiePi

            Yes, I expect we’ll see a lot of movement.
            Some employees don’t have as much job mobility, and they may suffer, at least in the short term.
            New employees hired for 40 hours at $X (67% of previous persons salary) will know that rate going in and may take it happily. (Obviously depending on many factors, but I’m thinking of retail shift “managers” mainly.)

        2. Mike C.

          If their hours are cut, so is their productivity. I have a hard time believing that companies (outside of rare seasonal cases) retain huge amounts of slack in their potential productivity, so if they have the demand for their products/services, they’re going to need the people to deliver.

          1. LBK

            I agree from the perspective of someone who understands the short-sightedness of forcing your employees to work at 110% until they burn out in order to maximize productivity, but I’m surprised you of all people aren’t more skeptical that companies will actually adjust their expectations accordingly rather than just expecting everyone to do the same work in less time.

            1. Observer

              In the short term, you may be right. But, there is only so much you can do with just “setting the bar higher”.

              1. MsMaryMary

                A manager once told me that everyone wants work done quickly, cheaply and with high quality, but that you could only really do two out of the three at any one time. Short term, I’m sure some employers will try to squeeze 50-60 hours of work into 40. Long term, it’s not feasible. If they try to keep up the same workload, employees will cut corners and make mistakes (not knocking the employees, it’s the only way to do more in less time). The only way to keep up the same work load at the same quality is to hire more people.

              2. LBK

                Agreed, I just think that business management in general favors only looking at the short term these days. I’m thinking of a survey Clinton cited in her NY Daily News interview where they asked a bunch of higher ups at big companies if they would take a hit to their profitability now in order to invest in training and development if it were guaranteed that it would increase their long-term profitability 5 years from now and they unequivocally said no, they wouldn’t do it. Both shareholders and the general public don’t have the patience or attention span for long-term strategies; think how often you see people acting like a company is done and about to go out of business because they had one quarter that trended down instead of up, and how the volatility of the market reflects that panic.

                1. Elizabeth West

                  It’s like the kids/marshmallows experiment. Get one marshmallow now, or wait five minutes and get two. They’re all like NO–NOW NOW NOW NOW.

                2. LBK

                  Yep. What’s frustrating is that there is some validity to those concerns because it’s kind of a self-fulfilling prophecy – people worry about the future of a company when the see a short-term drop in performance, they sell their stock which fuels the perception that the company is in trouble, and that puts the company into a downward spiral. So maybe the kids are right to take one marshmallow now because if the people running the experiment see a report that says that marshmallow futures are down, they might sell all the marshmallows before those 5 minutes are up and then the kid gets nothing.

                3. Observer

                  Sure. But, whether or not you see the long term, the long term WILL catch up with you. So, even if you are a short term thinker, at some point you begin to realize that your turnover costs have gone through the roof, what you thought was a spike in errors has stayed on that plateau and your customers are getting ticked off because orders and queries are falling through the cracks. And even people more concerned with the short term than the long term can see (and plan for) more than the next quarter.

                  Keep in mind that the effects of trying to fit 50-60 hours of work into 40 hours WILL show up and it won’t take 5 years.

                4. Mike C.

                  I hate hate hate hate this short term attitude that comes out of the business/management circles. It’s all about cashing in right now at the expense of everything else, including larger and more stable profits down the road.

                5. LBK

                  I think you’re right that the long-term effects come into play no matter what at a lower level – one manager of one department will definitely reap what they sow if they push their employees too hard and everyone quits. But at a high level, I don’t think it holds true because ultimately all that matters in terms of a publicly traded company staying afloat is the stock price. If the stock price stays up and the shareholders stay happy while at the bottom of the company employees are turning over every month, the people at the top don’t have much incentive to change their company’s culture.

                  I think that maybe on a very, very long term it will work out, but it will require things like more competition to appear for certain monopolistic entities (Comcast, for example) and the job market to fully rebound (so that people have options and don’t feel forced to take or keep bad jobs).

        3. Murphy

          This may mean the company hires a part-timer to take the other hours (or one FT for every two FT they had, or something).

          Yes, this could happen, but it would be really short-sighted for employers. Factoring in the other costs associated with bringing on new staff (equipment, training, benefits, etc.) would likely cost them more in the long-run. Two employees at 50% salary are generally more expensive than one at 100% salary.

        4. Zillah

          Hiring more FT employees to avoid paying overtime seems a bit like cutting off your nose to spite your face, since you’d likely have pay for certain benefits – some are optional, but some (e.g., health insurance) typically aren’t.

          1. MaggiePi

            It depends on the size of the company, the work, and the pay. If you’re <50, it probably cheaper to hire, but maybe not.

            1. LabTech

              Even in that case, would employers hiring more FT workers be all that bad? If enough employers needed more employees, it would create more demand for job opportunities, which would help shift the unequal employer/employee power dynamic when it comes to job searching, and cause wages to go up as a result of the greater demand (unless I’m missing something).

              I, for one, would like to start hearing back from employers on a reasonable timeline – even if it’s just to tell me they went with another candidate. And, more on point, a high enough salary for me to pay my student loans and put away money for savings would be nice.

    3. Elsajeni

      There are also people who are exempt but paid hourly — this would include a lot of folks like retail managers, who are likely to be affected by this change. Hopefully the effect for those folks would only be cutting their hours back to where their pay remains the same — working 1/3 less overtime would do it — but if what you’re hearing is mostly “oh, they’ll stop you from working any overtime,” I can understand being alarmed.

  5. Kittymommy

    Damn, from a purely selfish point I don’t like this. One of the reasons I took my current job is because I don’t have to track my hours, it’s a pain. And I invariably work more than 40 a week (yesterday I worked 12).

    1. Chloe

      Yeah! I may be moving into a salaried position soon, and I was so looking forward to not having to do that (I’ve been a contractor for the last year, and before that have only been hourly).

      1. Just Another Techie

        Alas, not all salaried exempt positions are free of time tracking. I’ve worked a bunch of jobs where I was legitimately classified as exempt but still had to track time in 6 minute increments because of requirements from customers or government contracts.

        1. Murphy

          Yeah, my husband is salaried and makes a six-figure income, but he tracks his time in 15 minute increments (including the time he spends tracking his time). He’s a billable asset to the company so this is just how it goes.

          I, on the other hand make a similar salary and only have to fill out a time sheet when I have something to report, like vacation or sick leave.

        2. Colorado CrazyCatLady

          Yeah, I’m salaried and exempt and have to track just to humor the powers that be.

        3. Chloe

          Oh yeah, I didn’t mean to say that they all were. I just knew this was one that didn’t require it. But I also recognize my whole naivete about this whole thing, and I was looking at the new rules from a very narrow perspective. I think this law will be a good thing in the long run.

    2. moss

      I’m salaried and have to track my hours because we’re billing to clients. It’s more about your industry than the overtime rules, I think.

    3. Mike C.

      You know, tracking hours isn’t as big of a deal as those who are working 60-80 hour weeks at insanely low salaries. Fast food “managers” (and I put manager in quotes, because the majority of the work they perform is the same as the employees they manage) are a huge example of this.

      Also, tons of exempt places track this sort of thing for billing or because it’s a good idea to understand the amount of time it takes to do something.

      1. KR

        I agree. It might be a pain to track your hours but there are a lot of people who will really benefit from this change.

        1. Lorraine C

          If a person can log into twitter then they should be smart enough to track hours. I am so confused as to why people are crying over having to track hours if millions of non salaried people can and already track hours why would exempt folks be behaving like it would be such a hassle?

          So being paid a fair wage and compensated for overtime is not worth having to log in and record hours ?!?!
          I track my hours and IT’S SIMPLE!
          Only in America .

      2. Observer

        Yeah. I really don’t get the big issue here.

        Flexibility is a different issue, and far more significant. Even that is not as significant the issue of low paid workers being pushed to ridiculous work weeks. Especially since the reality is that there are not that many jobs where you REALLY can flex between 30 – 50 hours without any hit to vacation time, etc.

        But “boo hoo, I have to fill out a time sheet”? Seriously? It’s just so out there that it’s hard to really get any sympathy going.

        1. TheBeetsMotel

          Really. If I had to work 60 hours per week, 20 of which I was receiving no extra money for, but instead of working 20 unpaid hours I have to do 5 minutes of paperwork per day? I’ll take the paperwork.

      3. Lindsay J

        This.

        Amusement parks I would say are one of the worst at this. At one of my former jobs at an amusement park, the managers were paid $27K.

        During the off-season they were required to put in 50 hours a week.

        During especially busy times (in Texas spring break was our big one) they were required to work an hour prior to open to an hour after close 7AM-11PM (16 hour days) for two weeks with no days off (224 hours in 2 weeks). And one manager a night was required to stay with us to close the cash room, which might take until 4AM, and they would still be required to be back in at 7am. They were making less than $5 an hour during those weeks. (And averaged probably about $10 an hour on average weeks).

        I’m sorry if people are upset about having to track their hours now, but that doesn’t compare to the quality of life increase that will happen for people in positions like that (and fast food, and even regular food service. My dad was a kitchen manager for a major restaurant chain in the US and made $40K a year, and averaged 80 hour weeks. He missed a lot of my and my younger brother’s lives growing up because he worked 12-14 hour days (10AM-10PM or midnight).

        No matter what happens for people in these situations, their lives will be improved in some way. The amusement park literally wouldn’t be able to cut payrates enough to bring them down to equivalent hourly rate during busy times a year, because they would be below minimum wage. So either they would get to not be worked to death (having 74 more non-working hours in a week can only be a good thing). Or, they would get a boatload of overtime. Lets assume they set the wage at $10.75 (which is about what $28k spread over 50 hours a week is). So the first 40 hours would give them $430. Then, time and a half would be $16.12. Multiply that by 74 is $1192. So, for their week of work they’d get paid $1622 before tax, which is a lot nicer than $538 before tax.

        Most situations aren’t quite that extreme. (And if anyone wants to know what that place was, well, it is an amusement park in the Houston TX area owned by a restaurant business mogul with a current net worth of $3.2 billion dollars who is currently starring in a shark-tank type tv show. Oh, and who also owns casinos where you can slide through a literal shark tank.) But, I have no doubt that there are fast food and retail managers out there in every mall in the US that are making $24K a year and working 50-60 hour weeks. So they’ll either get 10-20 hours a week back in their lives (which they could use to find another part-time job if they need additional money) or $170-$350 more in their pocket each week. (And, if you’re only making $2K a month, an extra $680-$1400 makes a huge difference in your monthly budget. That’s rent. And/or a car payment and car insurance.)

        So, yeah, I’m not really sad that some people may have to track their hours now that weren’t before. Or that they might have to worry about not working an hour here or there or risk the wrath of going over budget if they don’t.

        And honestly, most companies that employ people at these pay-rates are at pretty minimal staffing already. There aren’t really more positions to cut, because they would have been cut already. The doors have to open, the same tasks need to get done. They need some people to do it.

      4. Ms. Didymus

        Exactly. I *hate* tracking my hours and I am crap at it. Which is why I’m grateful that I won’t be impacted by this and my employer doesn’t make me do it.

        But if it is a decision between tracking my hours or allowing employers to keep screwing people making a low wage? Yea. I’ll track my hours.

        1. Kira

          The only time I really disliked tracking my hours was when my company told us that we should track 8 hours every day, no matter how many hours we actually worked.

          They said it was because the time tracking was just a formality. But if it was just a formality, then why make me lie about my hours?

  6. Minion

    Ugh I have such mixed feelings about this! I earn less and I’m exempt right now, so I will be affected. I absolutely hate the thought of not being able to take home work to do or being able to stay over an hour or two to finish something up. I would like to earn overtime, but it’s just not in the budget, so I’ll now be restricted to 40 a week or adjusting my hours the following week to mitigate the overtime I would have earned the preceding week.
    Which means, any time I work over will be scrutinized as to whether it is actually necessary and there will be no more spur of the moment decisions to just grab a couple of things and work on them at home in the evenings and no more sitting in the ED’s office talking about different things as they come up after hours when all the meetings and employee interruptions are done for the day.
    My salary isn’t that far below that amount, so maybe I’ll get a raise and won’t have to worry about it. I can hope so anyway.
    I understand why the law has been introduced – I get that and I believe it’s meant as a protection for employees, but I just worry about how it will affect businesses and especially nonprofits. I guess we’ll all see and maybe it won’t be as big a deal as I worry it will be.

    1. Minion

      Also, out of curiosity, is it illegal for an employee to work 12 hours one day, then only 4 the next to avoid earning overtime? What I’ve read seems to indicate that it is, but I’m not sure. Anyone know for sure?

      1. Countess Boochie Flagrante

        In most places it isn’t, but California also mandates overtime for hours over 8 worked in a day.

        1. Minion

          Oh. I thought there were laws against that. I was reading about “comp time” and might have misunderstood, though. Maybe that doesn’t apply to my situation.

          1. Oryx

            That’s not comp time. Comp time comes in when you actually work overtime. In the case above, if your other hours keep you at 40 hours for the week, there’s no overtime that needs paid. That’s just having a flexible schedule.

            If you worked 8, 8, 8, 12, 8 and your company didn’t pay you for those extra 4 hours and instead said you get comp time, *then* it would be illegal.

            1. Minion

              Oh, okay. That makes sense. I was really misunderstanding what comp time actually meant. Some of the sites that attempt to explain it aren’t that clear.

              Thanks for clarifying.

              1. LBK

                Yeah, comp time is similar to what you described but balanced out over a longer period of time – instead of you staying 4 hours late today and leaving 4 hours early tomorrow, your employer just banks those 4 hours into your comp time, you still work a full day tomorrow, and then you can take those 4 hours down the road at some point like vacation time. That’s not legal unless you work for the government. I don’t necessarily hate the idea but it certainly has potential for abuse given how difficult it is for some people to use their existing PTO, nevermind a special bank of additional comp time PTO.

      2. LBK

        Federal standards are just based on hours per week, so if you work from midnight on Sunday straight through until 4PM on Monday and then take the rest of the week off, you won’t get paid overtime. Some state laws have more specific rules though, like California (as mentioned above).

      3. Meg Murry

        In most states, that would be allowed – it’s overtime for anything over 40 hours in 1 work week, but hours per day don’t matter. However, in California I believe the law is OT for anything over 8 hours per day, and there may be other states or municipalities with this law.

        However, your scenario in your first post is technically not legal within the new law – by the new law you wouldn’t be allowed to adjust your hours the next week to avoid paying overtime (you couldn’t work 44 hours one week and 36 the next and call it a wash legally). Unless you mean if you worked 44 hours one week (and got paid for 40 straight time hours plus 4 OT = 40+4*1.5 = 46 hours of pay) you would be expected to cut down to 34 hours the next week to keep your pay in budget.

        1. Minion

          That’s what I mean. If I work overtime in one week, I’d be paid the overtime for that week, but would need to lower my hours the following week to adjust for the amount of overtime pay I will receive for the preceding week.
          To me, that’s still avoiding the overtime since we’re paid bi-weekly, but as I understand it, because the overtime was technically paid it’s legal.

          1. InfoGeek

            I think you can only average hours worked across a 2 week pay period in certain situations — I know it’s allowed for emergency personnel (hospitals, EMTs, paramedics, fire, police). Not sure who else.

          2. Stitch

            IANAL, I think that’s legal but unusual. Doesn’t really save the company that much money and loses a ton of productivity to have you cut 1.5 regular hours for each 1 overtime hour just to balance your biweekly pay. They’re much more likely to just sternly tell you to not take overtime unless strictly necessary, if they’re that much against overtime.

      4. Ask a Manager Post author

        That’s fine, unless you’re in a state like CA that calculates it daily rather than weekly.

        You can’t pay people in comp time, unless the comp time is taken in the same work week, thus keeping their total hours at or below 40.

            1. Katie the Fed

              Comp time gets paid out though as overtime if you don’t use it in a year.

              I can’t even hate on government rules. I get overtime (for me it’s just my regularly hourly rate) for any hours past 80 for a 2-week period. There are restrictions on it, of course, but it’s nice.

              1. Murphy

                Yeah, I’m in government too (not US, but still government) and my staff (who are eligible for overtime – my managers aren’t, and I’m certainly not) get a choice between paying it out and taking it as comp time. I’ve rarely had an employee ask for their overtime to be paid, almost all want the comp time. But , if they don’t use it within one month it gets paid out, I believe (so there’s no financial loss to them in that sense, and the comp time comes at the rate of 1.5 times as well – work 2 hours overtime, get 3 hours off).

                1. Melissa

                  Yep–I work in government as well (not federal) and comp time is available as an alternative to overtime pay. Either option comes in at 1.5 times. Also at least for our non-managerial workers, overtime is 100% optional and management is not stingy with allowing us to use our leave. It’s a good workplace and a good union.

            2. Justin

              Kind of an anti-government streak in here today, government jobs generally have good pay, benefts, and people are treated well.

            3. michelle

              I’m a salaried manager at a fast food establishment and I’m required to work 50 hours a week and on call and I make less than this new law amount. Does it apply to me

            4. (Mr.) Cajun2core

              Thanks for clearing this up. I work at a University and was told that we could bank up to 240 hours of “comp time”. However, I kept seeing how you were saying that you have to be *paid* for every our worked in a week. I was confused but now it makes sense.

    2. neverjaunty

      That’s one way to look at it. Another way to look at it is: “Going forward, my employer won’t be able to balance its books by stealing an hour or two of my time, or giving me work to do in the evenings without paying me for it.”

      1. AliceBD

        As I understand what Minion is saying, it’s their choice to work the extra time. No one is forcing them to. I do this too. No one at my job is making me work longer. I get higher-ups asking me why I am still at work at 5:45 when my manager left at 5. I choose to work more . And for me, it’s often less stressful to go ahead and get that thing done than to have to do it the next day. So while the new law is fantastic for people who are being exploited by their companies, like the amusement park employee example, it’s not great for those of us who are enjoying getting our work done and not paying attention to how much time it takes.

            1. Justin

              And hour of your life back, sounds good to me.

              Reminds me of people who are like “Well why can’t I work for free if want? Free market, right?”

  7. Syler

    Nothing to stop them figuring out a new lower salary so that with the normal OT it comes out the same – and then later cutting/banning OT to then have everyone at a new discounted price. I’m worried this will hurt a lot of people.

    1. misspiggy

      Employers could do that, but this assumes they don’t need a lot of the work people were doing. Or that ‘extra’ work would go to new people, meaning more jobs but slightly lower pay for everyone.

      1. Syler

        In busy times the OT might still be available and so pay stays the same, but if they have slow times due to business cycles, economy, holidays, etc…then employees would be working 40 hours at a lower salary than they were originally AND not getting any OT.

        1. esra

          That’s not going to work forever though. Good employees are still going to go elsewhere. Employers still need to attract and retain talent.

          It’s kind of… strange, looking in as an outsider. I get why Americans are worried, because there will probably be a period of a lot of employers acting like epic jerks, but in the long run, this has to be better. It’s like weird, nationwide Stockholm Syndrome.

          1. Kyrielle

            I suspect you wouldn’t find many employees weirded out if they knew it would all just land in the new shake-out position. The problem is, *during* the shakeout, some people may lose money and/or jobs as a result of it (even though, ostensibly, it should be leading to them having more money). In the group this affects, many of them can’t afford that short-term impact. The fact that it lands at a long-term good place doesn’t remove the anxiety that the middle step might leave them in a bad spot.

            (And I say this as someone this rule change doesn’t affect directly, or even strongly indirectly.)

            1. MaggiePi

              Exactly. The short-term negative effects matter even if the long term effects are all good.

              1. Ms. Didymus

                Of course they matter. But the question is: does the short term impact outweigh the long term impact? And is there a way to negate the short term while keeping the long term?

            2. Meg Murry

              Or even if they come out technically ahead, if the details of how the overall transition is going to work isn’t handled well it could still get ugly. My sister was switched from salary to hourly, which meant that she should have come out ahead with the amount of OT she was working – but her boss turned into a total micromanager about it, simultaneously asking “why did you have so much OT last week? That can’t continue?” and “when is X, Y and Z going to get done? I need to stay until that’s done” Then she would nit picking about the timeclock and punches – why Sus clocked in at 8:10 a handful of days instead of her official start time of 8:00 or left at 4:50 one day or took a 1 hour and 15 minute lunch instead of an hour – just a few minutes after chewing her out for working until 7 pm earlier that week. Basically, it was completely NOT a 8-12, 1-5 kind of job but the manager freaked out if the time cards said anything other than that (and she was clocking in and out on her computer, so it put an exact timestamp – or as close as exact as the slow, buggy system could get). Basically, my sister was in a lose-lose-lose situation that was a textbook example of how NOT to treat a valued employee (and she wasn’t the only one, it was a combo of micromanaging boss and crappy HR policies).

              1. Meg Murry

                That said – I agree that this ruling will be good in the long run, but everyone needs to watch how it is handled in the short term to avoid negative fallout.

          2. Student

            I kind of expect most companies will just flout the law for as long as they can. They already flout the law on many other points.

          3. Syler

            I agree it needed to be done and will benefit a lot of people. I’m just saying there are some people who may have their world turned upside down.

            It took me 5 years – including being promoted to management and being there for 3 years – to get back to the annual take home that I was making before I was given a 2K raise and made an exempt Lead. That first year I took a 22K hit in salary because of the difference from no longer getting OT. Of course, the hours stayed the same.

              1. Toby

                I was non-exempt, making 44K and working 60-80 hours a week a good portion of the year. I ended up with about 68-70K at the end of each year from salary + OT. Seriously, I was used to getting paychecks for double my base amount on a routine basis.

                They promoted me to a Lead. No change in job, no change in responsibilities, no change in hours. Bumped me up to 46K. At the end of the year, I made 46K.

                I didn’t see 70K again until about 5-6 years later after I had been a manager for a little over a year and finally got my salary bumped to 70K.

                This was about 10 years ago, so if this would have happened then, the threshold probably would be lower than $47,476 – but if it wasn’t, they would have gladly sprung for the extra $1746 to get me over it.

        2. NarrowDoorways

          This is my worry. I don’t work EVERY weekend. I don’t work EVERY evening. But I work enough that an overall pay cut would be devastating. I was very blunt with my HR person this morning. If they choose to cut my based pay, I’ll be finding other employment.

      2. Mike C.

        Yeah, folks really need to account for this. I’m sure there are employers out there who will do this spitefully, but the economic demand of the customers still needs to be met.

    2. Slippy

      They might do that but companies that want to attract talented people probably won’t lower the salary. Also by lowering the salary you are announcing your new norm is a 40+ hour week with a pay cut if you are efficient. If you think government inefficiency is bad wait until you have a bunch of people at a company where making their old salary relies on them being slower than normal.
      Overall it will probably hurt some people, any change you make always affects someone somewhere, but this could be a good thing. A lot of employers have not shaken off the recession mentality for hours and staffing and the longer that goes on the more the idea of long hours and low pay gets entrenched. Right now we have a system that rewards bad employers for taking advantage of people.

      1. Lindsay J

        And also, it’s easier to compare jobs when you know the hourly wage up front. There are some jobs I would take for $15, but not $12 or $10. So it’s easy for me to see when I’m told the hourly rate is $11 that I’m not interested and back out of the hiring process.

        It’s more difficult when you’re told that the salary is $30K a year. If you’re really expected to only work 40 hours a week, that’s fine and comes out to $15 an hour. However, when it turns out that you’re really expected to work 52 hours a week (even though everyone during the hiring process lied and said that the place has great work/life balance) you’re back at $11.10 an hour and may have unwittingly just taken an effective pay cut in your hourly rate.

    3. Christina

      This is what has happened to my husband, except they added a kicker…they redefined a salaried manger’s work week to be 52 hours. My husband now has to work 12 extra hours ever week or he makes less than he did before the change. They kept his salary and added the hours, so essentially his pay went down per hour. Most times he did work overtime, but now it is a must. It just goes to show how little his company values their employees. Most weeks he worked 45-50 hours, and sometimes it was as much as 65, but now it is 52 no matter what or you just don’t make as much. I think it is horrible.

  8. MaggiePi

    Thank you for the easy concise summary. I’ve been watching these developments, but I know lots of employers, especially small businesses and NPOs may be completely unaware of these coming changes. Spreading the word is so important!

  9. Coffee and Mountains

    I’m a little worried about my brother — he’s exempt but makes way below the new threshold and works overtime. I hope they don’t cut his rate so he works the same amount of hours for the same pay. :(

    1. misspiggy

      Sorry to keep asking, but why would that be a bad thing? He’d be no worse off than before – or am I being dim and missing something?

      1. Victoria Nonprofit (USA)

        Right – what’s wrong with working the same amount of hours for the same pay?

        1. Meg Murry

          If his overtime is seasonal or fluctuates, it means that his paycheck would be for inconsistent amounts – it might be the same over the course of the year, but it’s a lot easier to budget for a paycheck of $3750 a month ($45,000 a year) than some months being closer to $3000 and others closer to $4000 – even if it’s all the same at the end of the year. But your landlord doesn’t care that you didn’t get OT this month – your rent is still $X a month.

          1. Pineapple Incident

            This- exactly this. If they cut your rate and you end up not working as much overtime, you could make WAY less money than you used to. Higher base rate is always better.

        2. Editor

          Having lower base pay can cause future problems. If the worker changes jobs to a new employer who is obsessed with calculating a new hire’s pay based on base pay without overtime or bonuses, the worker’s leverage for higher pay in the new job is undermined. Using salary history this way is sleazy, but it happens.

      2. Paris

        I would image the problem would be that if for some reason, the company suddenly didn’t need all that overtime (lost a client or a big project, or finished up a big project that’s causing everyone to work overtime with no new project to replace it), then people are going to be making less money.

    2. Coffee and Mountains

      I think it’s because I don’t really feel like he’s compensated fairly — I think he makes about mid-30s but isn’t getting overtime even though he works 6 days a week once or twice a month. Even though he’d technically be getting the same salary, he would be getting a pay cut the other two weeks a month and I feel like that’s kind of squeezing blood out of a turnip.

  10. Countess Boochie Flagrante

    Honestly, a part of me thinks that raising the minimum exempt salary was overdue, because having it set at $23k seemed kind of insane to me (at least where I am, that’s a wage that puts you on food stamps). But on the other hand, raising it that high seems to me like it might have been too much all at once, and I wish there were a smoother, less exploitable way to bring society to where we actually value people’s work more and don’t have to be strongarmed into paying decent wages or letting people have a life outside of work without starving them.

    1. MaggiePi

      Yea, agreed. I am glad the new rule has an automatic adjustment timeline built in, so this doesn’t just happen again in 10-20 years.

    2. Slippy

      They (Congress) had to jump it by a lot because they may not have gotten another chance. Plus if it was phased in the next administration could have easily overturned or (more likely) defunded and suppressed any enforcement from the get-go.

        1. i'm anon

          Yes, some congresspeople are actually rallying to block the DOL reg by passing a law.

          1. Countess Boochie Flagrante

            Of course they are. After all, this is America, where corporations are people too!

    3. I'm a Little Teapot

      Unfortunately, many businesses won’t do the right thing if the wrong thing might be profitable, unless they’re forced to. And even then they’ll kick and scream and whine the whole way.

    4. Natalie

      It was way overdue – IIRC the last adjustment was 30-40 years ago. The new threshold is just the old threshold adjusted for inflation.

      I’m so happy they realized they shouldn’t do this again and pegged it to inflation. They should have done that from the start.

  11. Lauren Hopkins

    I am in the group effected, and I already know my employer’s plan is to increase my salary and the salary of an employee I supervise to above the threshold to maintain our exempt status. I’m concerned about two things:
    -that myself and the other salaried worker will be stuck working ridiculous hours to compensate for the limit that will be placed on other employees (that are currently salary but will go to hourly with the change)
    -that myself and the employee I supervise will essentially be making the same salary. I have a master’s degree (he has bachelor’s) and I have several years more experience as well as additional responsibilities and oversight. My boss is aware this will be a problem (he acknowledged it before I had to say something, which was great), but I’m afraid he’ll try and give me, like $1000 more (or less – sheesh) and say that’s equitable (I’ve got it in my head that I want to be making at least $5k more, but realistically $10k more would be more appropriate).

    1. finman

      Kind of curious what industry you work in that pays someone with a masters and a direct report less than $46k

        1. finman

          I understand that some folks with a masters in an unrelated field are currently underemployed and thus may not be paid as much as their education supports. But in this situation, it would appear that having the degree might be tied into the hierarchy of this org structure.

      1. Georgia Peach

        Lmao, lots of industries?? Academia, for one. There are vast geographic swaths of the country for which $46k would be an incredible salary for someone with a master’s degree and a direct report.

        1. fposte

          And a lot of the people affected will be exempt part-timers, too, so it’s pretty easy to come under the threshold there.

        2. Lauren

          This is depressing, but true. MA / MBA required for admin jobs is a thing and has been for years. A college degree is now what a high school diploma once was – minimum. People with masters for basic professional jobs that do not actually require the knowledge learned from them to do the job – just end up in extreme debt. A masters, bu often making only 30k isn’t worth it. Makes me wonder about the application systems that weed out us lowly (only have a BS / BA) people – I just got out of school debt at 36 yrs old. I don’t need more debt. I ignore those jobs, but some parts of the US – you can’t ignore it if this is the new normal.

        3. Anxa

          I’ve lived in high COL and low COL areas and that seems pretty high to me for a masters if you have limited experience, but life sciences have a pretty low pay to education ratio.

          I know plenty of PhDs who’d be thrilled with that, and expect to work well over 40 hours for it.

          I’d be more curious about industries that would pay someone w a masters more than that and require little experience.

        4. Kira

          Or a PhD. Lots of jobs in academia for people with fresh doctorates (i.e., postdocs, not professors) get paid in the $30-40s. The highest we saw was about $58k and required a PhD plus a few years of post-doc experience.

      2. Joa

        Libraries, for one. Masters are required and entry-level librarian jobs are in the low to mid 30k’s in many parts of the country.

        1. JP

          Yep. I meet the threshold, as do two of my very long-tenured librarians, but most of my staff is affected by this. And we flex time a lot, so it’s a bit of a bummer to those librarians who are losing that flexibility.

          1. Joa

            Yeah, as director, I meet the threshold as well, but my librarians don’t. I don’t let them work a lot of extra hours because they are underpaid to begin with, but they do flex their hours back and forth between weeks. That is a nice bonus for them. This isn’t going to be too bad for us, but is annoying and inconvenient.

          2. ScarletInTheLibrary

            I will be losing that flexibility. Basically we have a rotation for a Sunday shift. It works out to six Sunday’s a year. It’s nice to get six bonus paid days a year. Also we have special events (all of them are outreach and advocacy events like manning the booth at a cultural event or judging history day). It’s nice to be approved for these and have some flexibility on how long we stay and get some comp time.

      3. Eugenie

        Museums have TONS of masters (heck, even Ph.D.) level employees that wouldn’t meet that salary. Yes, even in major cities.

      4. twbb

        Social work is a good example of needing a Master’s plus the accompanying licensure to make maybe $40K as a supervisor.

    2. MsMaryMary

      I also think it will be interesting to see how this impacts the perception that people need to find a job at a new company to get a decent raise, and the flip side that Millennials are job hoppers with no sense of loyalty. This change has been in the news a lot today, it might plant in people’s head that if they’re taking on a job with certain required qualifications (like a masters or a certain amount of exeprience) or certain responsibilities (like people management) that they should be making more than $47,000 a year. Maybe a lot more.

  12. Mustache Cat

    I’m decently happy about this! Yeah, tracking hours will be a pain, but it’s nice for our work to actually be worth money.

    Although, does anyone know if there’s any kinda exemption for nonprofits? There sometimes are to these employment laws.

          1. Ask a Manager Post author

            I think there is some confusion about this.

            Nonprofits wouldn’t be covered under the FLSA as enterprises if they don’t do business of more than $500,000 per year. But individual employees of nonprofits are almost all covered under the FLSA as individuals if they engage in interstate commerce, which can include making/receiving interstate telephone calls, using interstate mails, or sending/receiving interstate emails. It would be really unusual to find a nonprofit employee who didn’t meet that test.

            1. Doreen

              I think that may depend on the type of non-profit. The ones I encounter are very local and provide direct services (job training, counseling, substance abuse treatment, housing, medical care etc). I’d be surprised if most of their staff engaged in any sort of interstate communication.

                1. Observer

                  Yes, but if you look at the rules, if it’s very occasional and “minimal effort”, it wouldn’t count.

                  That covers a huge swath of our employees, as it happens. Of course New York has its own rules, so it’s a moot point. But, yes, the exception for non-profits is not as narrow as it seems at the lower end.

                2. Ask a Manager Post author

                  Hmmm, I’d like to know more about this. I’ve never worked with a nonprofit that wasn’t covered (as employee or consultant), but maybe there are more than I realized.

                3. Observer

                  Some examples:

                  In house health aids. The aids are generally not making interstate calls, emails or orders.

                  After school programming – There is a chance that someone in the policy / advocacy portion is dealing with groups that cross state lines. Everyone else?

                  Social work – You are dealing directly with the clients, sometimes the immediate and frequently with city / state agencies. In most cases, out of state contacts are vanishingly rare.

                  Most adult ed / vocational assistance – The exception is the people who are actually doing job placement, which might be done across the tri-state area. But the instructors, counselors, etc. are working directly with clients.

                  In general, from what I see, a lot of direct service non-profit work really doesn’t require calls, emails etc. out of state. Advocacy sometimes does – it depends on what you are doing and who you are working with. Same for fundraising. And, SOME of the administrative stuff – like the person who is dong the purchasing, because that’s so often done on line.

                4. Creag an Tuire

                  @ Observer:

                  I suspect with most of the examples you name, there’s about to be a huge argument over whether taking Medicaid contracts qualifies as “interstate commerce” or “charity”. (You’d think that would be a no-brainer, since “charity” implies no reimbursement at all, but the healthcare industry has managed to get Medicaid qualified as “charity” for years and fights tooth and nail to keep it that way.)

                5. Observer

                  Creag, most of this stuff is not funded by Medicaid, although there are a lot of government contracts. And, given the way these contracts are managed, it actually makes sense that they are considered a charitable activity.

              1. Megs

                I’m thinking that in this situation the organization and the employees would almost certainly already know that FLSA doesn’t apply – as far as I can tell, the rules for overall coverage haven’t changed at all so there would be no change for them. I’m currently in one of those rare jobs where I’m not covered, and I definitely noticed.

              2. Lillian McGee

                Yes, ours is very small and very local and as office manager I’m probably the only one that regularly works with out-of-state entities like vendors. However we work with a PEO and they are our employer of record, so we might not be exempt from FLSA because we are under their umbrella. Really not sure at all so I’ve got some work to do before December!

              3. Kimberlee, Esq

                I think the requirement would even be triggered if any of the services are provided with good from another state… so, unless the medical provider is getting all their medical supplies in-state, they would probably trigger. Though I could definitely see some hyper-local businesses avoiding that trigger.

                1. Creag an Tuire

                  That was my initial read, but from the DOL’s own website:

                  To explain this further, take for example a nonprofit animal shelter that provides free veterinary care, adoption services, and shelter for homeless animals. Those are charitable activities. In addition, the shelter provides veterinary care for a fee to customers, which is a commercial activity. If the revenue generated from the organization’s commercial activities is at least $500,000 in a year, the employees engaged in the commercial activities are protected by the FLSA on an enterprise basis. Employees of the organization’s charitable activities are not covered on an enterprise basis since those activities do not have a business purpose. However, an employee who spends a considerable amount of time fundraising on the phone and taking credit card donations from other states would be individually covered.

                  So it seems that the rules are only meant to apply to the individuals engaged in interstate commerce, not everyone employed there if a few people engage in interstate commerce.

      1. ali

        This is my concern as well. I’m president of the board of an organization with currently 8 full-time employees. We have done an incredible job of giving them benefits and time off and maternity leave (they are all women, we don’t actually have a paternity leave policy in place yet but it is on my list). Everyone except the ED will fall into this new group. We definitely don’t have the budget to pay overtime, there are probably a few people who make around $45k that we can bump up to the threshold.

        So I guess in my non-profit, this falls on me and the rest of the board to figure out. I am not a numbers person, so here’s hoping my treasurer has some insight…

    1. Victoria Nonprofit (USA)

      Me too. I’m baffled by all the negative responses. Yay! We’re asking employers to treat and pay people reasonably well.

      There’s no exemption for nonprofits, thank goodness. Nonprofit employees – especially lower-paid nonprofit exmployees – should have to give up their lives for the cause.

      1. MaggiePi

        I assume you meant to type they shouldn’t have to give up their lives for the cause, and I agree.
        I do think it will be doubly hard for NPOs (who can’t raise the price of goods) to adjust to such a big change so quickly. Even if they were given a longer grace period, or a lower threshold for this year and the same for next year, or something, I think that would be helpful.
        I don’t think NPOs should work people 80 hrs/week or anything either, but I don’t want to see wonderful small NPOs close, or have to suddenly rely on volunteer labor in ways that make them unstable.

        1. Ask a Manager Post author

          Yes, many nonprofits are going to have to cut programs and/or people. They’ve been paying according to the rules they were given and this will be a massive change for some of them.

          1. Victoria Nonprofit (USA)

            And, in my opinion, this is a good thing. We can’t change the world for the better by exploiting the people we ask to help us change it.

            (Another example: The Minnesota Council of Nonprofits just released its salary and benefits survey, and only 14% of Minnesota nonprofits provide paid maternity leave. My organization – a large, well-funded, well-known MN nonprofit – does not. And yet we produce programming about maternal and infant wellness. Shame on us.)

            1. Ask a Manager Post author

              Again, it will be in the long-term. In the short term, cuts to people and programs will be directly harmful to some people. We can acknowledge both of those things :)

              1. Syler

                Yes -Please be sensitive to the fact the short term ‘pains’ are actual people who may have preferred being exploited to being eliminated or having their time and a half taken away.

                I was the sole support for my family. No matter what they did to me, I had to keep working. You can’t just say that “all the good people will leave” because it’s very hard to search and interview for jobs when you’re burned out and exhausted from working 60 hours a week.

                So although it’s for the best for the most in the long run, it may be devastating to some now.

                1. Victoria Nonprofit (USA)

                  Yes, I apologize. I’ve been insensitive in this thread.

                  What I will say, though, is that the current situation is devastating to some now. This change will hurt some people, just as the current situation hurts some people. I’ve been a person who has been devastated, made ill, had to quit my job and take a massive pay cut in doing so, by being paid a nonprofit salary and asked to work absurd hours. So I’m incredibly, deeply, profoundly grateful for this change.

                2. Ms. Didymus

                  I get that and I wish there was a reasonable way to make real change without causing harm to real people. But I place the blame on organisations that have been exploiting people under the “because we are legally allowed to” umbrella.

                  I’m sorry for those that will be hurt in the interim, but I am incredibly happy for those that will benefit long term. And I was ecstatic to see there is a requirement to update the pay threshold every 3 years so we don’t go through this again.

                3. Anxa

                  There was some rumbling about pushing our dept to require a lunch break, thinking it was ‘cruel’ to have has hope for a break or limit lunch to a five min break.

                  What would be cruel is limiting our chance to get more hours so we can actually eat; most of us make poverty earnings.

        2. Creag an Tuire

          I think this is partially a case of “jerks ruining it for everyone else” — I’d be more favorable towards a non-profit exemption if there weren’t so many entities that are basically for-profit companies hiding behind non-profit label (looking in -your- direction, hospital industry).

        3. neverjaunty

          It’s not like the change was made overnight, or that there was no heads-up that it was coming. They’ve had time to prepare.

          1. Ask a Manager Post author

            Preparing for many nonprofit is going to mean cutting programs or staff, so it’s understandable that they’ve not wanted to do that before the rule was even final.

          2. Observer

            That’s not so simple. Given the way many non-profits are structured, it may not even be possible to prepare. And, it’s nit necessarily about non-profits that are being exploitative or are poorly managed per se. Often the rules we run under create some really bad results.

            For instance, in many cases, non-profits cannot legally raise the salaries, even though that’s what makes the most sense, because the salaries are hard coded into government contracts. Yet, those same government contracts flatly forbid paying overtime. And, even if the organization pays for overtime with other funds, they may get marked down by the agency for “poor management” for having those overtime hours on the books. There is not a lot an organization can do to “prepare” for this.

            In the short term, this is going to be a nightmare. In the long term, a lot of this will shake out in the better run agencies who are also good at figuring out how to make the rules functional, as they sign new contract with budgets that have better pay scales. Till then, services are going to be cut or quality is going to be hurt.

      2. Government Worker

        I think it’ll be a good thing in the long run for sure – in three years, employers will have adjusted budgets and expectations and more people will be treated and paid fairly. But I can understand the worry about the immediate future after the rule goes into effect. With any big rule change there are often some losers as well as some winners, and there will be some people whose overall pay, or even whose jobs, are cut when the rule goes into effect.

        1. MaggiePi

          Agreed.
          Short-term transition period = painful for some.
          Long-term effects = helpful for many.

      3. Clever Name

        I know. I feel like everyone has been brainwashed to accept the idea that low pay and long hours are a good thing (they are for certain employers- more for less!). It’s almost like Stockholm Syndrome. Yes, I understand that nonprofits are Doing Good, but I honestly question the notion that the status quo is anything but abusive to workers. And we go along with the abuse because what other choice to we have? We do it and then convince ourselves it’s noble. I really hope this new law helps the massive income disparity in the US.

        1. Ask a Manager Post author

          I don’t think it’s Stockholm Syndrome; I think it’s a recognition that the transition will be painful for many, even though it will ultimately shake out as a good thing long-term.

          1. neverjaunty

            That’s true, but I think Clever Name is talking about the mentality that people working for non-profits (especially cause organizations) are expected to substitute a love of doing good deeds for a fair wage and decent treatment.

        2. Minion

          For my particular nonprofit it’s going to be a bad thing – at least in the beginning. We got a 1.8% COLA, starting next fiscal year and still, all of senior management except for one person will still be under that threshold. That includes the ED , which will be an hourly position going forward under the new rules. That seems incredibly low, I’m sure, to a lot of the commentors here, but in this area it’s considered at least a decent wage to make above $40,000 per year. In fact, when I accepted this position, it was about at that level and I was thrilled with the salary because it was nearly a 50% increase over what I was making in my previous job.
          We’re federally funded by several grants and the funding isn’t going to increase in order for us to raise salaries, at least not that I’m aware of. So our budgets remain the same while we’re now trying to negotiate overtime rules for our senior management team who often need to work extra hours.
          Maybe it won’t be as bad as I think – I don’t think anyone’s working 50 – 60 hour weeks right now, so we can probably manage it, but it’s going to be really tough.

          1. Kristy

            If no changes were made to how they determine exemption, but exempt folks under the threshold must be paid overtime, does that make them a new type of class? I keep seeing mentions of exempt positions under the threshold going hourly under the new rules, but unless it’s how each organization has decided to deal with it, I’m confused about the connection.

            1. MaggiePi

              People under the threshold would become non-exempt, just like people currently under the current threshold.
              Non-exempt employees can be either hourly or salaried. Some currently salaried-exempt employees will likely become hourly-non-exempt employees and others will likely become salaried-non-exempt.
              The idea of salaried-non-exempt seems to be throwing people off a lot, as the distinctions between salaried and exempt are not well understood by many outside the legal field (and some inside!). I am so excited that sites like this one are working to educate people on the differences and their rights.
              Salaried-non-exempt has not always been a common classification, but very possible. I expect in some industries it may become more common now.

              1. Kristy

                Thanks, MaggiePi! I understand salaried non-exempt, as I work in the nonprofit field and have been hourly, salaried exempt in two positions, and now salaried non-exempt. While I am passionate about the nonprofit sector, I did sometimes feel that those of us who were exempt and making significantly under the new threshold were sometimes taken advantage of, and I am in support of the new rules. What I didn’t understand was whether people under the threshold would become salaried non-exempt, hourly, or some new salaried exempt but paid overtime category, and whether the new rules outlined the next steps or left it to businesses to decide how to respond. Thanks for helping me understand!

      1. Ask a Manager Post author

        It would be really unusual to find a nonprofit that wasn’t covered under FLSA — it would have to be very small and very narrow in scope! The vast majority of nonprofit employees are covered because their work involves “the regular use of interstate emails, telephone, and mail.”

        1. Rachel in Minneapolis

          I work for a church and perform mostly religious duties although I am not clergy. I am exempt at a 3/4 level, although for several weeks a year I travel for things like supervising a mission trip and camp.

          We generally use comp time to balance out the weeks where we put in 70-80 hours.

          I earn below the threshold. Is there a resource to explain how these rules will affect me? Our volunteer treasurer has no idea how to apply the rules in this situation.

          1. Ask a Manager Post author

            I would think they’ll affect you like everyone else moving to non-exempt the way I described in the post, unless there’s a detail here that I’m not getting the significance of? (And there may well be.)

          2. Kimberlee, Esq

            Exemption doesn’t really apply for less than full time (so, if you were exempt at 3/4 time at 3/4 of the threshold for the salary floor, you were probably not being paid fully legally, which I don’t mean as an attack, it would be reasonable to assume you could prorate the salary floor for part-time exempt but you can’t). You can’t use comp time unless it’s in the same week and keeps your hours under 40 for the week. And your org is covered by FLSA unless you don’t manage to trigger that interstate commerce clause discussed above.

            Likely, all of this means that if your pay stays the same, you will be restricted to 40 hours per week or less, and your employer would need to pay overtime for any hours over 40, even if there are other weeks in the year where you only work 20 or 30. But IANAA.

            1. Ask a Manager Post author

              I think she means she’s paid enough to be exempt but only working 3/4 time … but yes, if I am wrong, that was illegal all along!

    2. Waffles

      Not all non-profits are covered by the FLSA. There are also situations where individual employees may be covered, even though their organization as a whole isn’t. There is more information for non-profits on the DOL’s overtime page.

      That said, as others have mentioned, there is no exemption if the non-profit is covered under the FLSA.

  13. limenotapple

    I’ve heard that this won’t affect faculty, but does that mean just teaching faculty? What about all the people who are classified faculty (librarians, writing center staff at universities, other roles that are faculty but assume a 40 hour, 9-5 workweek?) Does anyone know how that will work?

    1. limenotapple

      Okay I didn’t mean for that to be a reply to someone else’s comment. Sometimes I get confused :/

      1. Georgia Peach

        As long as you make what an entry-level “teacher” (which I’m assuming means instructor) makes at your institution, you should fall into this category:

        Academic administrative personnel: The administrative
        personnel that help run higher education
        institutions and interact with students outside the
        classroom, such as department heads, academic
        counselors and advisors, intervention specialists
        and others with similar responsibilities are subject
        to a special salary threshold that does not apply to
        white-collar employees outside of higher education.
        These employees are not entitled to overtime
        compensation if they are paid at least as much as the
        entrance salary for teachers at their institution.

        1. fposte

          Oooh. That is seriously interesting. I will have to look at the whole document–thanks.

    2. Pwyll

      Folks whose primary job is teaching, tutoring, instructing and mentoring within an educational institution are exempt under the “Learned Professional” exemption, and the salary threshold does not apply. I would think your writing center staff who assist students would be covered under that rule, but I’m not entirely sure how librarians would be considered.

        1. Pwyll

          I think it could be argued that some librarians’ -primary jobs- might not be teaching. Not a blanket statement on all librarians (who I never would have graduated school without).

        2. fposte

          Everybody involved in education has something to teach students. But the FLSA rules are about primary duties. K-12 librarian? Quite possibly. Academic librarian? Less likely.

          1. quiet academic librarian

            For academic librarians, very much depends on what department they’re in. Reference/instruction librarians are much more likely to be teaching in some way than, say, cataloging or acquisitions librarians.

  14. Hlyssande

    Hahaha, whoops! I just emailed you about this exact thing!

    I’m not sure what my employer’s plans are. I currently make around $43K and am exempt. In all likelihood I’ll just get a raise and they’ll call it good.

      1. Hlyssande

        Yes, that would be great! I’m a little iffy on whether I should be classified as exempt though. I got a promotion to a new salary band and was told I was exempt, but my duties didn’t really change and I got a ‘specialist’ in my title.

        /she says, eyeing a 6am test time scheduled for this Sunday.

    1. Persephone Mulberry

      I’m hoping my company chooses to do the same. I’m new here, and now I’m extra glad I negotiated for an extra 10% because it puts me that much closer to the threshold (a 7% bump to stay in compliance seems like it would be easier to swallow than 17%).

      1. Hlyssande

        I hope that works out! I was already going to talk to my supervisor about her policy on flexing time for me (exempt) and brought up this ruling. We expect to hear something from HR on high about it.

  15. PNW Dan

    My union is in contract negotiations right now. It will be interesting to see how (or if) this affects it. I’m in the affected group, and I work about 45–50 hours/week.

    Thanks for the good summary, Alison.

  16. LQ

    I’m so surprised that so many people who are salaried don’t have to track their hours at all. When I was salaried I kept very careful track of my hours. How many hours could go to each grant and be billed to certain clients that had billed hours and such. If hours aren’t tracked at all that seems like a good way to end up with management in the position of not knowing where the time is being spent.
    (My hours are tracked much less carefully in my current job than they were previously, so maybe there is a small employer/large employer thing here too.)

    1. Clever Name

      When I worked for city government, the only time I touched my timesheet was when I took vacation or sick time or to log comp time (and then subsequently take it). As a consultant now, it’s all about chargeable time, so yeah, I track the heck out of my time.

    2. PizzaSquared

      I don’t have any stats, but I think that workers who have work billed to multiple clients (or whose work involves grants) is a tiny percentage of the overall workforce in the US. If neither of those is the case, making exempt employees track their hours is pure overhead.

      1. CAA

        There are other reasons than client billing and grant management for tracking hours. Lots of software developers who work on commercial products have to do this because on corporate tax returns some types of development activities are treated as capital investments and others as expenses. It can make a big financial difference to the employer, so most of the medium and larger software companies I’m familiar with make their people track time.

        1. PizzaSquared

          Yes, fair enough. I have worked for a software company that did this to some extent. However, it really was a ballpark of “what percentage of your time this month was spent on each of these large categories,” not “clock in and out every day, write down what you do each hour, etc.” I still strongly believe that hour tracking for exempt employees is the exception, not the rule.

        2. Judy

          I’m pretty sure it’s not just software, but any kind of product development and design. If you can trace your development cost per project, you are allowed to treat it as an investment.

          Every job I’ve had as an engineer over the last nearly 25 years has required me to log in to a system and assign hours to projects and task codes. Some required me to do it daily, some weekly, but all of them have required it. I didn’t ever have to put in start and end times, but I did have to put in quantities of time. There were overhead projects with codes for vacation, sick, training, etc.

    3. ThatGirl

      I don’t have to track my hours to get paid, but I have to track it for the projects I’m working on, for budgeting purposes.

      1. LQ

        Yeah, that’s why I’ve had to track it in the past for budgeting. Which I guess seems like it would be much more common. And for me at least didn’t require that much work. 75% of it was already on my calendar which made it very easy.

    4. Ms. Didymus

      We don’t bill clients so there is little reason to track my hours. As long as I can complete my tasks and keep my team running effectively, that is all my upper managers need from me.

  17. Katastrophe

    I’m curious to see how my company will handle this. I’m exempt and make below the threshold, but my company is entirely remote. This means all of us regularly log in early or stay on late or check emails on our phones in the evenings or even catch up on work during the weekend. Tracking time is a huge hassle, as we all agree, made especially difficult when I’m able to do work anytime and any place. But if they just want to raise my salary so they don’t have to deal? Fine by me!

  18. Boop

    The universe hates me. I’m just over the threshold – it looks like a lot, but I live in a large metropolitan area with an extravagant cost of living.

    New job!

    1. Victoria Nonprofit (USA)

      Yes, me too (except I don’t want/need a new job). Under the original proposed rule I would be included, and with the ~$4,000 decrease in the limit I’m now above it. Sad trombone.

  19. Marie

    I have personal concerns about this, because like a lot of people here, I enjoy a great deal of flexibility at my job. But I am elated for what it means for my field as a whole. I’m a social worker, and as a group, we routinely are expected to put in 50-60 hours for between 30-40k. Employers manage this in a variety of ways, many of them illegal. Some social workers just don’t know the law or their rights, and some do, but because we’re a field of do-gooders, social workers tend not to complain, because we want to keep serving the clients who need us. Cynically, I don’t think social workers ever could have organized to protest the ways our roles are exploited for free or cheap labor, so I’m glad the feds stepped in for us.

    I am very interested to see how employers manage this with social workers, since it is literally impossible for most of us to do our work in 40 hours a week, but 47k is UNHEARD OF for many of our positions. Will they… actually have to provide full staffing to cover caseloads? Or give us raises to do the same work we’re doing? SO delighted by either prospect. I suspect initially what will happen is we’ll be expected to cut our hours back to 40, which means realistically, clients won’t get served. Which will break a lot of social worker hearts, but it’s long past time our field stops allowing employers to generate reports for funders showing caseloads covered and clients served when we know dang well the quality of service is subpar because we’re all so burnt out and worrying how to pay our own rent. The true cost of providing social services (or not providing them) needs to be brought to the surface.

    1. JAM

      Yes, I’m shocked by all the negative reactions because I’ve been in a field like yours where they exploit workers like this. I am thrilled for my former coworkers and I know they would all take the huge pay raise or the huge reduction in hours that they are currently putting in. The law gives them a reason to say they can’t do overtime now where previously the bosses got around it with the salary rules and some emotional manipulation. I hate for people to fall through the cracks but hopefully this begins higher funding for things like social services.

      1. Mona Lisa

        I agree wholeheartedly with this. A lot of the people I worked with who got sucked into jobs like this were young women who, because of a certain level of naivete, get coerced into working crazy hours and then, since it’s one of their first jobs, believe that this behavior is normal and to be expected of an employer. I look at this change as a way of protecting workers who are currently being exploited and possibly incorrectly classified as exempt.

    2. Prismatic Professional

      I’m also thrilled about this for the same reason! I’m not a social worker, but am in a helping profession!

    3. TCO

      Agreed. I’ve worked for some social services who didn’t expect (or want) loads of unpaid overtime, but I know plenty of employers in this sector expect it, or at least allow it to happen (rather than helping to define boundaries that would help their staff prevent burnout).

      I have compassion for some of these agencies that do their best with very limited resources, but I think it’s important to expect that they serve their employees as well as they serve their clients. Social workers shouldn’t have to rely on support programs themselves such as subsidized housing or food stamps/shelves. There’s no shame in using those support programs but service providers need to be part of the solution by ensuring that their employees all earn a living wage.

    4. Katie the Fed

      The other thing – people who previously worked unpaid overtime who are now restricted to 40 hours a week – they can now have more time for a second job, or classes, or something else. That extra time can be a good investment.

    5. Jade

      Maybe it’s gonna take seeing how few clients can be served at the current rates of pay to finally make some changes to social services. Social services is a classic example of the reason this law is going into effect- too many employees being exploited.

      1. fposte

        Yeah, I think that’s going to be the area with the most obvious cutbacks as a result. And my state’s already had shutdowns because of the withholding of state funding, so it’s going to be a challenging time.

    6. neverjaunty

      Well said. It’s disgusting that your employers use your commitment to your clients to coerce you into underpaid and free labor.

      1. Justin

        A lot of non profits aren’t really all that “good” and they’re also used by the conservative anti-government program crowd as a way to say “Hey, charities will take care of that! Government should stay out of it.”

  20. Skyler

    Just to check, does this affect everyone regardless of size of the organization and/or if they’re a public or private employee?

    1. Pwyll

      Effectively, size of an organization does not matter, and non-profit/for-profit doesn’t matter. There are some special rules for state and local governments, but they’re affected too.

    1. MaggiePi

      Not to burst your bubble, but this may not happen. Unless your hourly wage is close to minimum wage, they may cut it according to pay you the same after overtime.
      For example, if you currently work about 60 hr/wk and make $40,000/yr, they could set your new wage at $11/hr. Then ($11*40)+($16.5*20)= $770/wk = $40,040/yr

      1. Eric

        But presumably they are paying the current wage, because that is what the market requires. Wages are notoriously “sticky” when it comes to decreases, so I think this is less likely to occur.

        1. Act

          Yeah, slashing everyone’s wages is a great way to make us all quit. That would be kind of hilarious, though, in a schadenfreude way.

          1. MaggiePi

            And if you’re still working 60 hours a week and making $40K, same as you were before really, they didn’t slash anything. They just defined an hourly wage rate that wasn’t defined before.

            1. Act

              I’m paid annually, not hourly. If my annual pay goes down as a way to stop me from getting overtime, I will stop working extra hours to compensate. If my company tries to mandate 60 hour workweeks, I will leave because that’s batshit insane.

              Or, to put it another way: I would never accept an offer that includes 0 vacation days when I could very easily get one with two weeks’ worth. Giving two weeks of vacation costs companies money, but they do it because they aren’t just looking for warm bodies to fill desks, but actual talent that can use skills to help them succeed, and getting this talent requires offering something in return.

              Unless every single potential employer in my line of work gets together at some kind of Evil Conference on November 30 to agree the going rate for my job is being lowered by $20k, leaving me with literally no other options, I have literally zero concerns about market rate for what I do.

              1. GH in SoCAl

                I think this is an example of the kind of trouble employers will have effectively communicating proposed changed to their employees.

                If you reread Maggie Pi’s post, you’ll see that the newly-defined hourly wage would mean you continued to make the same amount annually for the same amount of work you are now doing — and that would be legal (unless it took you below minimum wage). They wouldn’t be paying you less — unless you started working fewer hours. Under that scenario, you wouldn’t gain anything or lose anything.

                Don’t get me wrong, I hope people who are being exploited get to take home more money or work fewer hours. But you can’t be sure that’s what will result in each specific case.

                1. MaggiePi

                  This exactly.
                  I’m not saying I hope everyone’s employers does this, but that they absolutely could if they decide the pros outweigh the cons.

        2. MaggiePi

          That’s true, but the entire market will have to adjust to this new threshold. If they all do the same thing to stay solvent as a business, where do you go then?
          I’m just hypothesizing, as employers could react and adjust in a number of ways. But a major change like this can cause market reactions outside of the typical norms.

          1. Meg Murry

            Yes, I wonder if there is currently some industry discussion going on, that could kinda lead to wage fixing, either directly or indirectly. For instance, if the CEOs of the 3 biggest employers in the industry are all at a conference together and one says “how are you going to handle the new rule?” and another says “We’re going to adjust the hourly base wages based on some overtime – probably 45 to 55 hours a week” the others might say “Oh yes, we were thinking of heading that way too.” And next thing you know, that has become the local industry standard.

            Or smaller companies could be waiting to see what larger companies will do – and if it’s something like adjust salaried employees to a lower base pay, based on more than 40 hours a week for *really* large employers- I’m pretty sure that’s going to hit the papers. So if Wal-mart or Target or WidgetsRUs announce that that is how they are going to set their base hourly wage for the employees that were formerly salary, then all the smaller shops can either follow their lead and know they are following industry norms, or can be a tiny bit more generous in the hope of attracting new employees or retaining their current ones.

            I’m not saying anyone is going to go out and start a wage fixing scheme on purpose. But I suspect that is what is likely to happen.

            1. Juli G.

              I’m not sure I understand the “wage fixing” concern. This happens already – industry employers are comparing wages, benefits, etc. all the time to ensure that they’re on a similar wavelength with their competitors in the industry.

              1. Meg Murry

                Comparing your wages to the current industry level is common, and standard practice.

                Multiple companies getting together and deciding that they will only pay $X per hour for a certain role is technically wage fixing and is considered illegal collusion.

                My scenario probably doesn’t go as far as illegal wage fixing, but it does result in many companies all paying the same rate, so people wouldn’t be able to just go find a new job if they didn’t like the way their current employer was handling the switch – because they all will be handling it that way.

        3. Ask a Manager Post author

          Except that if you’re salaried (as plenty of non-exempt people) are, the “wage” is your annual salary, not hourly. If you’ve been getting a salary of $45K and that’s considered competitive, it will continue to be so.

        1. Anon anon anon

          But won’t your new job be impacted by the same issues? You might find salary decreases in your profession across the board?

          1. esra

            I can’t imagine Americans would collectively put up with drastic, across-the-board paycuts that take everyone down to minimum wage. You’d be like, fleeing up to La belle province.

            1. MaggiePi

              Yea, but we can’t (legally) get a job there either. Work visas are hard to come by.

              1. esra

                At least you’d get to chill with the Québécois in the meanwhile. It’s just sad that American workers, collectively, feel like they have so little power.

            2. Mike C.

              This certainly hasn’t happened in places that have (or have continually) raised the minimum wage either.

              1. Ms. Didymus

                Nor did it happen with Obamacare. Or with any other instance when people screamed “WE’LL ALL LOSE OUR JOBS!!!!!!!!”

                1. Justin

                  It’s just away for unscrupulous employers and anti-government types to scare you.

          2. Act

            No reasonable employer is going to suddenly start slashing salaries. If my employer does that, they are unreasonable and I will find a different one.

            The idea that suddenly companies will further screw over their workers in response to laws that help workers is pulled out in every single discussion on workers’ rights, but it has literally never happened. It didn’t happen after The Jungle, and it won’t happen now. Good companies will chug along, bad ones will be bad and lose good employees, they will go out of business, and the market for skilled labor will soldier on.

            A company that can’t meet the new demands deserves to have its talent poached by those who can and go out of business. That’s the free market.

    2. Student

      … or more free time, which is far more likely than more money. Means you can go get another job, get training, or start a side business if what you want is more money.

  21. Ell

    I’m all for this. My last job paid 25k/year with 65 hour weeks during the “slow” period and 80-90 hour weeks during the busy period. They also deliberately don’t do a good job explaining this during the hiring process. It was totally ridiculous and unsustainable – particularly because this was in a large city with a high cost of living.

    I suspect that organization will now just lower the base pay because there is no way that they can meet the new threshold and I doubt they’re willing to change the hours without a major overhaul. I just don’t see it.

    However, I think that when they advertise 16k/yr + overtime pay it will make the ridiculousness a little more transparent to applicants and their recruitment will suffer (as it should).

    Of course in my new job I’ll now lose flexibility, which sucks. But ultimately if its protecting people who are the most exploited it’s a tradeoff I’m willing to make

    1. Eric

      They’ll run into issues with minimum wage if they lower the base pay. ($7.50*70 hours per week*52 weeks is over 27K already, before you factor in time and a half for overtime).

      1. Ell

        Interesting. Because if they change folks to be non-exempt to avoid the 47k threshhold, they’ll have to pay minimum wage, right? Hadn’t considered that, thanks.

    2. Kyrielle

      Actually, I think they have to raise it a little no matter what – because if I’m doing my math right, otherwise it drops below minimum wage per hour worked. If they go to minimum wage and only allow “slow” periods, it’d be:

      (7.25 * 40) + (7.25 * 1.5 * 25) = 290 + 271.87 = 561.87 per week. Assuming the person works 48 weeks and takes 4 weeks off without pay (because I’m assuming they avoid paid time off), that’s $26,970 per year.

      And that doesn’t include any 80+ hour weeks – an 80-hour week would be $725 for the week, and would rapidly skew the amount per year up.

      tldr; They may adjust base pay downward, but they’re still either going to have to pay more or reduce hours, even doing that.

      1. Ell

        Wow, thanks for the math! Sothey’ll end up paying at least marginally more no matter what. Again, happy to trade off less flexibility in my current position if it means my old coworkers and people like them get paid a living wage.

        1. Delyssia

          It could be even better, since a lot of large cities with high costs of living have a higher-than-federal minimum wage. (In Washington, DC, it’s currently $10.50/hour and supposed to go up to $11.50/hour before the new overtime rules go into effect.)

        2. Student

          More specifically, if you’ve actually been working 65 hours per week for 25k, they have likely already been violating the minimum wage law. This will make it harder for them to violate that law, and more transparent to you when they do so.

      2. Kira

        This post made me realize that the current exemption threshold is really close to the national minimum wage!

    3. blackcat

      I suppose the good news is that the amount of overtime you’ve described would cause a higher overall pay when switched to hourly, even if the position was minimum wage.
      If base pay is 7.50/hr, assuming 2 weeks unpaid vacation and 25 hrs of OT per week, I get 29k/year by doing the math. So it’s still better than 25k, by a wide margin.

    4. DoDah

      Feel free to ignore this question if it makes you uncomfortable–but I have to ask. Was your job in retail?

    5. Ms. Didymus

      First, those hours are not reasonable at any salary.

      But holy hell are you kidding me at $25k a year!? I would have laughed in their face and I’m sorry you weren’t in a position to do so.

  22. newlyhr

    This is a good and necessary change. Many employers have benefited from low paid “exempt” employees who subsidize corporate profits by working way in excess of 40 hours weekly. There will be some bumpy times during implementation but overall I think we won’t see broad and drastic changes in hourly compensation once the dust settles. After all, this is the pay sector of the economy that is actually growing, which means that there is some competition for employees.

    1. lulu

      I agree, I think it’s good overall. The transition period might be tough for some companies and nonprofits, but long term this will protect workers.

  23. Nonprofit and Curious

    Does anyone know whether that 47k is just base salary, or base salary plus benefits? I’m currently exempt and just under the threshold, so I’d be over if the value of benefits is included in total compensation.

  24. GigglyPuff

    So if I currently get comp time instead of overtime pay, they are now required to do the overtime pay?
    p.s. Alison thanks for explaining it! Some of the articles really aren’t very concise, you spell it out perfectly.

    1. Eric

      If you take the comp time in the same week, then it is ok, otherwise that is correct (assuming you are non-exempt). (Or if you work for the federal government, then I think there is an exception there too)

      1. MaggiePi

        And you’re not in California. (We need an acronym for this as it comes up so much! Like x/CA or something.)
        California requires overtime for anything >8 hrs/day.

  25. Eric

    Also note that the threshold for “HCE”s is going up. This is the threshold for which there is a much easier duties test to pass. It is going from 100K to about 130K. The intent of this change is to make it so secretaries in high paid cities/industries still qualify for overtime.

  26. Nervous Accountant

    Ok so I talked to some coworkers and it seems like Professional employees, such as accountants, are exempt from any overtime rule, including this new one.

    I’m going to keep an eye on this.

    1. Clever Name

      I’m not sure this is correct. Yes, the type of work you do goes into the equation to determine your status as exempt or non-exempt, but the salary one is pretty clear cut, IMHO. If you make less than a certain threshold, regardless of duties, you are non-exempt.

      This link is for the old rules, but the salary is a standalone requirement: http://www.flsa.com/coverage.html

    2. Eric

      I don’t think that is the case. Being a Professional employ is relevant to the “duties test” portion of the law. In order to be exempt from overtime/minimum wage laws you must pass 3 test:
      Salary Basis test (ie. you are paid salary not hourly)
      Wage level test (you make over a certain amount. This is the one that is changing to 47K)
      Duties test (you perform professional, executive, or administrative work)

      So being a professional employee means that you could be exempt IF you meet the other two tests.

    3. Clever Name

      An exerpt from the link (still in moderation)

      “With few exceptions, to be exempt an employee must (a) be paid at least $23,600 per year ($455 per week), and (b) be paid on a salary basis, and also (c) perform exempt job duties. These requirements are outlined in the FLSA Regulations (promulgated by the U.S. Department of Labor). Most employees must meet all three “tests” to be exempt”

      So for you to be exempt from getting overtime you must get paid the minimum amount (which is changing) AND be salaried, AND perform exempt job duties. Your employer can’t simply say, “You’re all accountants, so you’re exempt no matter how little we pay you”

      1. MaggiePi

        So for you to be exempt from getting overtime you must get paid the minimum amount (which is changing) AND be salaried, AND perform exempt job duties. Your employer can’t simply say, “You’re all accountants, so you’re exempt no matter how little we pay you”

        YES! You have to tick all the boxes, not any of them.

      2. blackcat

        By you can say “You are all teachers, so you’re exempt no matter how little we pay you.” It’s one of the few that’s always exempt.

        1. Chinook

          “By you can say “You are all teachers, so you’re exempt no matter how little we pay you.” It’s one of the few that’s always exempt.”

          There is a good reason for that – how do you judge what a teacher’s work hours are? The time they spend in the classroom? Does it include time for marking? If so, does that mean English teachers who mark essays automatically get paid more than P.E. teachers who mark performance during class? What about time for lesson planning? New teachers spend many, many more hours lesson planning than experienced teachers, so should the new teachers be paid more? And teachers often counsel students not just between classes but before and after class and even in the middle of the grocery store on the weekend (in fact, that was always where my best teacher/student talks took place.) Should we paid overtime for those 5 minute conversations or the ones we have when we are calling parents in the evening (because we can’t do it while supervising students). There are so many reasons why teachers have to be listed as exempt because tracking the hours worked would be impossible because it is one of those jobs where you are never really off the clock.

          1. blackcat

            That’s true, but I still think there should be a floor on how little teachers can be paid. I’ve seen teaching jobs at religious schools offering right around 20k/year. Even in high cost of living areas, entry level teachers rarely make more than 40k.

            A vaguely reasonable floor would be 2/3 or 5/6 of the exempt floor, assuming 9 or 10 months of teaching per year.

            1. Elizabeth the Ginger

              I definitely agree with this. I also think that how much teachers are paid should be much more tied to the cost of living in the area where the school is. I also like the ideas some cities have floated of subsidizing housing for teachers, either by giving them access to lower-rent housing or financial assistance when buying a home for the first time. Mostly these are theoretical so far, but I think they have potential.

              It’s not good for an area to limit its pool of teachers to (generally young) people who are willing to live with multiple roommates, people who are married to/in relationships with high-income partners, people who have no outside obligations (like family) or hobbies and so can live hours away, or people who are heirs to some kind of fortune.

            2. A grad student

              There definitely should be- I was reading above about this exception and particularly how it applies to universities. Adjuncts should not be eligible for food stamps.

              1. Anxa

                im very curious. I am in a teaching position and am poor be of a dearth of hours. It seems the more directly you work in teaching students, the more likely you are to be part time.

                I am applying to a job at my school that appears far less emotionally and mentally demanding, but pays more than triple the salary; there’s no teaching involved.

          2. Turanga Leela

            If schools had to pay teachers for their overtime, they would require teachers to log their hours in the evening (which would probably mean that academic teachers would make more than PE teachers). You might also see shifts to more planning time during the day, lighter courseloads for new teachers, smaller classes for grading-intensive subjects, and fewer non-teaching expectations.

            I think it would be a really interesting experiment. Currently, teachers are expected to take on an enormous amount of work, most of which is hidden from the public and even their supervisors. As schools have cut non-instructional staff, there’s been a lot of the “do more with less” and “work smarter, not harder” mentality that someone mentioned above; there’s a limit to how much of that is sustainable. In the other jobs where you’re never off the clock, people are paid better and often (though not always) treated better.

            1. Chinook

              True, a teacher can easily log her hours but she really can’t predict or control them. If student needs help, you stay late. An average essay may take 10 minutes to mark unless you get an incoherent mess. If the choice is between giving comprehensive feedback or having to face your boss that you put in unauthorized overtime, it could be a tough call. Plus, it would be murder to budget a school year unless it became ok for teachers to leave students unattended because they maxed out their budgeted hours. And considering the copier wars i have seen and the lengths teachers will go to at the end of the year when there is no paper left in their budget, I could only see it going badly (or end up with only the PE teacher available to cover advanced calculus)

              1. Kira

                What about if teachers tracked their hours, but made above the threshold so overtime wouldn’t be an issue? I agree that the job should be done well, and can be unpredictable. I also get annoyed when we say that we can’t possibly track teacher’s time because their work isn’t all in the classroom.

          3. Elizabeth the Ginger

            I’m in agreement with you. I am 100% for increasing teachers’ wages, especially beginning teachers in expensive areas. (I’ll reply to this comment with a link to an article about how hard it is for teachers to stay in the San Francisco Bay Area since rents are so high there.) But the concepts of being “on” or “off” the clock don’t feel as applicable to teachers as to, say, administrative assistants.

            I was an assistant teacher for two years before I was a lead teacher, and at the school where I worked ATs were paid hourly. On the one hand, it was nice to get overtime when something big happened – but on the other hand, I felt like it created an even bigger line between the associate teachers and The Real Teachers. Even if I had a really good planning flow going with my lead teacher after school, at 3:45 I had to stop and leave – because I was only supposed to work 37.5 hours a week, and if I went over that without permission I got in trouble.

            1. Elizabeth the Ginger

              Article: “Teachers priced out: SF educators struggle to stay amid costly housing, stagnant salaries.”

              http://projects.sfchronicle.com/2016/teacher-pay/

              (I also live in an expensive area compared to teachers’ salaries, and dislike that if I weren’t married to someone in a higher-paying job, my options would be a) live with roommates like I did in my early 20s, b) commute for literally hours each way, or c) relocate. If I were married to another teacher, we could probably afford to keep renting a one-bedroom apartment, but that doesn’t fit with things like long-term plans of raising a family.)

              1. DoDah

                I agree that teachers lean toward the low side of the pay-for-value scale. However–I know teachers in NJ who are paid in the 100K range (and they get benefits into retirement). Is this just because they have a strong union? These are not department heads–and they don’t have advanced degrees.

                1. blackcat

                  Teachers in parts of the mid-atlantic/north east be really well compensated. Yes, it does generally depend on the union, but also local tax rates. In many states (particularly in the south) it is illegal for teachers to form unions.

                  I did my student teaching in a solidly middle class (not upper middle) suburb of Philly. The teachers were well paid! Dedicated to their students! Not overworked! So helpful to young, naive, me! I guess people’s fears of strong teacher’s unions are that bad/lazy teachers are protected… but what I saw was that the union made it possible for them to focus on doing their jobs well. I think it was a particularly good union/district.

                  It was like teacher heaven, and the kids there definitely got a far better education than most public school kids. But those jobs a REALLY hard to get.

                2. Kay

                  And I was getting offers of teaching job in Alabama for 28k. Full-time classroom work in a good school district! It’s all about where you live. The south may have a lower cost of living, but it doesn’t justify pay that low.

          4. Student

            That’s a cop-out. Just because some of the duties are fuzzy doesn’t mean they aren’t job duties, or that it’s impossible to track time at them. Teachers were exempted from many labor rules for pink-collar reasons historically, not because these are insurmountable problems or their time is un-trackable. Just because teachers have, as a field, been successfully conned into doing much of their work off the clock doesn’t meant that’s how it must be done, or even that it’s a good way to do it. They could have non-classroom work periods or days. They could hire assistants to mark papers while teachers work with students – that’s how a lot of fields work (including teaching at some universities); your doctor doesn’t personally perform and evaluate every test she gives you, for example.

            1. Chinook

              While I don’t disagree with the fact that pink collar bias plays into it, I disagree about teachers being able to teach without doing the physical marking. The reason for schoolwork is to judge whether or not students are grasping concepts or developing their skills. Sure, multiple choice and short answer questions can be delegated, but nothing replaces reading long answers and essays to get a feel for student capabilities and weaknesses. And just because some profs at universities use TAS for this purpose doesn’t mean it is good pedagogical practice. Profs are rarely taught how to teach, never mind the theory behind what you do.

            2. SAHM

              Ooooh! I like this!! I was wondering what would happen if teachers went over their time but having TA’s would definitely increase teachers abilities to focus in-classroom and provide better assistance overall.

            3. Kay

              I currently work at a school in Japan, where teaching is NOT a traditionally feminized job, and you know what? Teachers get paid overtime. It’s in contrast to the business workers, many of who still do work off the clock despite efforts to reduce that practice. Teachers are well-respected here and they are compensated to reflect that. Of course, there’s trade-offs. Most teachers do all their work in the staff room and don’t leave until 7~12–but that’s a part of the national culture, more than a problem with teachers in particular.

  27. LizB

    I wish I knew who I should be asking about how this is going to play out in the organization I work for. I’m exempt and about $15k under the threshold, so there’s no way I’m getting a raise to put me above it. I know I’ll have to start tracking hours, but I don’t know whether they’re going to allow overtime or what. My role pretty much has to have a flexible schedule due to the nature of the work, so there are just going to be weeks that require 50 hours and weeks that require 30 hours — there’s no getting around it. I’m really curious how my organization is going to handle this.

    1. Elizabeth the Ginger

      If you have regular one-on-ones with whoever manages you, this would be a totally reasonable thing to bring up. I’d present it as “I’m sure this hasn’t been figured out yet since it’s all new, but I’m curious so keep me updated!” Also mention anything you think is important for higher-ups to keep in mind, like the fact that your schedule has to be flexible (if HR might not fully appreciate that).

      They will have to allow overtime when you work 50 hours, though – that’s the whole point of the rule. You *might* wind up seeing an increase in what you earn in a year, but if they don’t have space for that in their budget they might calculate your hourly pay based on how often you’ve historically gone over 40 hours/week. In any case, unless they do bump you up $15k, your paychecks are going to vary more in 2017 than they have in the past.

    2. Editor

      One thing an organization can do about work weeks with high and low hour variations is to change the work week. If your high work weeks and low weeks each fall into a Monday-to-Friday week, they could offset some but not all of the overtime by having a Wednesday-to-Tuesday workweek. That wouldn’t help with back-to-back high hour weeks, but it would reduce overtime if high-hour weeks and low-hour weeks alternated.

      This model works best if the hours are scheduled in advance and known, not if the business is an all-hands-on-deck-when-hell-breaks-loose seat-of-the-pants operation.

  28. ali

    I’m a little confused on the new bonus provision. Say I make $45k base salary (exempt), which puts me in the group who would need to be compensated. But then I get anywhere between a 10%-15% bonus each year, which puts me above the threshold. The way I read the provision, I think that means I would no longer need to be compensated for overtime?
    Am I understanding that correctly?

    1. Eric

      This applies to “nondiscretionary bonuses and incentive payments, paid no less often than monthly”, so it sounds like it wouldn’t apply in your case, if you get the bonus annually and it is up to the discretion of the company as to if you get the bonus.

  29. KatieKate

    I get comp time for overtime–can someone explain if this applies or not for me? Thanks!

    1. MaggiePi

      Are you a government employee? If not, I think you can only comp in the same workweek (and not in California).

      1. Ask a Manager Post author

        Correct. You can take it in the same week so that your total hours still end up at or under 40. You cannot take it i a different week. Well, you can, but it would have zero impact on the overtime you were owed, so it’s unlikely they’ll let you (since then they’d be paying you overtime AND giving you comp time for the same hours).

        1. ZSD

          Weird. When I worked in California (in a salaried, non-exempt position), I got comp time in lieu of overtime pay, and it was basically added onto my vacation. They didn’t make me use it the same week. Was this illegal? If so, it seems like the University of California system is breaking federal and/or state law with its overtime policy!

          1. Ask a Manager Post author

            University of California = public employer, with its own rules on this. (That’s why MaggiePi was asking if you were a government employee.)

            1. ZSD

              Ah, thanks. I guess I didn’t realize that the California exception wouldn’t apply to public employees. Thanks for the clarification.

    2. Sigrid

      Offering comp time in lieu of overtime has always been illegal, unless you work in government.

  30. Elle

    I’m confused about the tracking hours part, do all salaried people need to start tracking their time?

    1. Clever Name

      No. Only if you are below the new minimum threshold and will be paid overtime. So if you currently are salaried, are working as a say doctor, make $100k, you are certainly exempt so you wouldn’t need to track your time. If you are salaried, are an accountant, make $40k, and routinely work overtime, and they don’t plan on changing your base pay, yeah, you’ll have to track your time to get overtime owed to you.

  31. Mona Lisa

    I’m experiencing some serious schadenfreude today because the awful non-profit where I used to work is absolutely freaking out and scrambling to figure out how they’re going to make things work with the new laws. I’d say about half of the employees there are currently misclassified as exempt, make <$26k, and work 40-60 hours a week, and another third at least are truly exempt but are under the new salary guideline. One of the main reasons I left that organization was their inability and unwillingness to pay their employees fair wages so I'm curious to see how they end up sorting themselves out.

    1. Chameleon

      Places that can’t adequately compensate their employees don’t deserve employees.

    2. neverjaunty

      If you still talk to those folks, tell them to get an employment lawyer (in the US this can be done for free). Misclassification is an expensive mistake for an employer to make.

      1. Mona Lisa

        Most of the people with whom I’m still in contact are either in or have been moved into the genuinely exempt positions. The people who are in the misclassified ones typically don’t last too long because they burn out so quickly. In 13 months I was there, we had 33% turnover, most of which was in those low-level positions.

  32. NaoNao

    I am very excited for this (not for me, since this doesn’t apply) for all the people in retail management. I recall being paid 26K (a fortune to my 22 year old brain) to be a *store manager* of a Waldenbooks, and expected to routinely work 60-70 hour weeks doing restock, merchandising, rotating periodicals and destroying unsold copies, etc etc. It’s awesome that *finally* companies will have to stop exploiting young people full of idealism and energy who are willing to work/really need a job.
    There may be cases where the company tries to “encourage” you to somehow make the goals in only 40 hours, or lets people go who aren’t super human, but eventually they’ll see the pattern: no one can achieve what they’re asking in 40 hours or less per week.

    1. MaggiePi

      Agreed. I think retail “management” is one of the biggest areas that needed this adjustment.

        1. MaggiePi

          Yes, mentally I was lumping that into retail but it’s definitely worth mentioning explicitly.

          1. Meg Murry

            Yup, this will be a big deal. I have family members who worked in grocery stores as department managers (Deli Manager or Bakery Manager, for instance). By being managers, they were salaried – but in addition to the management duties like making schedules and ordering supplies, they were also expected to work regular shifts just like the hourly employees – and they often got stuck working even more shifts if someone called off or quit – and they were really pressured to take the shift rather than allow an hourly employee to pick up a shift that would put them over 40 hours a week or for a part timer to go over 30 hours a week (or whatever the ACA limit is). This meant that a normal week was almost always 60 hours, and bad weeks were 70-80. Plus the shifts they wound up covering were almost always the crappiest, like the 5 am shift making the donuts, or weekends, and they were never consistent from week to week.

            Since its a low cost of living area, and it’s a job that people usually worked their way into from a retail position rather than via college, the salaries typically weren’t very high – probably in the 40-45k range if they were lucky. Which meant that on those 80 hour weeks, they were only working for about $10 an hour. So more than one of them reached the point where they left management and went to work as a regular hourly employee, where they were making a comparable hourly wage but with way less stress and way less hours per week. Of course, that meant a slightly lower paycheck – but it was a major improvement to their overall life.

  33. animaniactoo

    As with the new minimum wage rates being pushed into effect in NY and other areas, I am eagerly waiting to see how this plays out.

    Because I very much doubt that those at the higher levels of the pay scale are going to sit back and hold steady or take cuts on their own current incomes and allow the wage gap to actually close back up nearer to what it used to be proportionally. Call me cynical.

    1. Observer

      Wage compression is a real issue – it’s not just cynics who understand that.

      In fact, some of the very organizations who supported a higher minimum wage in New York are pointing out that when budgets are adjusted there needs to be SOME adjustment for people paid a higher wage. Not to go back to the spread that was, but something.

  34. Angel

    I think this will be trickiest with entry level employees. In my industry, $47,000+ is about $10,000 too high for entry level employees. I have some people like this on my team, and I hate that I will have to pull back flexibility for them, but I can’t give them all huge raises to put them above the threshold. And I have folks that are “close enough” that I will probably just bump them to $47,500 – even if they are only average employees – because turnover costs more than $2500.

    1. fposte

      Can you have them track their own hours? I’ve had hourly employees with flexibility before and it’s worked okay.

      1. Lindsay J

        Boyfriend was notified today that as of next week he will be considered non-exempt as a result of this law. He makes right below the threshold ($43K with $3K of “discretionary” bonuses that – in practice – are given every year).

        I’m surprised they didn’t bump him up above the threshold. But, considering he doesn’t really work over-time anyway it doesn’t mean much for us either way.

        1. Kira

          I assume the lack of overtime work is the reason why. I worked more than 40 hour weeks at my last job, because if I just kept myself to 40 hours I would get criticized for being “checked out” and “not a team player”. I hope they would have bumped my salary, because if not I would have been caught between a rock and a hard place.

      2. RR

        re flexibility for hourly: I, too, have had good success with this– I have had strong performers, reliable and responsible, and in non-exempt positions. They were free to track their own hours, and since we are not in CA, could vary them by the day, so long as they didn’t exceed 40 in a week. But the flexibility is still reduced compared to exempt staff. For example, some exempt staff where I am now have the option to arrange their hours so they have every other Friday off. That will be off the table for some of them if they are moved to non-exempt. More concerning to me, although I am in generally in favor of this change, is that the change in status will affect assignment of tasks. At my NPO, we generally do *not* work crazy hours, but do often go a bit over 40, and sometimes a fair bit more. And this can be fore international travel, weekend events, and other actually rather interesting assignments. What I have seen happen is that if you are non-exempt, you are not eligible — too much overtime. And you miss out on some potentially career-enhancing opportunities

    2. Mrs. T

      Exactly. I hire entry level now in low to mid 30s. I’ll hold out for people with 3-5 years experience if I have to pay $48000 to retain flexibility.

  35. asteramella

    I’m pretty optimistic about this for myself. I make a few thousand dollars below the new threshold and I’m sure I’ll either get a raise or gain new work-life balance by being converted to non-exempt + forbidden from working overtime. My company’s very unlikely to cut my base pay. (If they do, however, I’ll walk and I won’t be shy about letting them know why.)

  36. cjb1

    Would this apply to active duty military members with weird salaries? For example, making $29,400 as a base salary and then $37,000 in housing, food and incentive stipends. They would be required to be paid OT too? Or do military members get classified differently?

    Caveat: I’m super new to the military job thing (as in my husband has a military job he’s won, but he will not start until fall at the earliest). So bear with me here. : )

    1. Eric

      Not 100% sure, but I don’t think the military is effected by this. They are a world unto themselves.

    2. Eric

      Found it: “Excluded workers include: members of the military, unpaid volunteers, the self-employed, many religious workers, and federal employees (with a few exceptions)”

    3. Chinook

      Can’t speak to the US military, but the Canadian military doesn’t pay overtime. If they need you, then they need you. But, if they don’t, then maybe they send you home early for the day. And if you have a planned vacation and they need you, they will reimburse the costs of cancelling your plans but you still have to show up. The attitude is that they own/rent your body for the time of your contract and they have the right to use it when needed as well as the responsibility not to wear it out or break it unless required to do so for operational reasons.

      Those who worked in offices, like DH, rarely had overtime and when he was on call, no compensation unless he was called in (at which time they gave him another day off). If they worked in the field, the only time there was an OT was when they were in the field or training. Often, if they were back at base, they were sent home early once their duties for the day were done.

  37. hbc

    This makes me wonder if we’ve been playing it too loose at my company. There is zero encouragement to work more than a 40 hour week, and we have a culture where maybe only the two highest-paid people put in extra hours on a regular basis. But…we haven’t been tracking hours for non-exempt office staff in any official way. We assume they’re in for 40 hours unless they tell us otherwise. If anything, we get less than 40 hours on average because we’re completely fine with people leaving at their normal time when there was bad traffic in the morning or leaving early to dodge a snowstorm.

    Is this one of those things where lawyers and HR managers will recommend you have documentation that someone worked from 7:17 to 4:02 with a 45 minute lunch on May 3rd just in case some disgruntled employee makes up terrible stories, but it’s enough that we have an iron-clad policy that everyone would agree is not just words on paper? Or is it asking for trouble that we don’t have real evidence that we didn’t work someone for 160 hours last week? I imagine there might be increased scrutiny with the new policy, so I want to make sure we don’t get in trouble for documentation when our actions are completely in the spirit of it.

    I know, I know, the obvious answer is to just get it documented, but we’re a small company and have to do a lot of triage.

    1. J.B.

      From a law standpoint, you are fine if people work slightly under 40 hours, but not if they work over 40 hours. I don’t know how much energy to put into tracking at this point, but maybe talk with all the supervisors about keeping an eye on it?

      1. hbc

        It’s basically none. The one person this applies to comes in around 7, leaves at about 3:30, takes a half hour lunch. If she worked until 4 today on something, her boss would tell her to knock off an extra half hour early tomorrow or to come in late, or maybe not say it because it’s understood and been said so many times before. Realistically, she’s probably come in at 7:15 a couple of times or taken longer on lunch so she doesn’t even worry about it. Is it possible that in any given week she might hit 40.25 hours? Sure. But I’d bet the average is closer to 39, and probably even lower.

        I’m the manager of the person who will be affected by the change, and I am unrelenting in making sure that person doesn’t average extra hours when exempt, so the pattern is already set.

    2. asteramella

      So non-exempt employees don’t turn in time sheets or anything like that? You just pay them for 40 hours unless they, what, email payroll and ask for overtime pay?

      Yeah, that’s not good business practice.

      1. hbc

        Just office non-exempt. (People on the production line punch a clock because timing matters a lot.) We literally have one office non-exempt person now, and will have two when the change comes into effect.

        I know it’s not “good business practice” in that no one is going to say, “I recommend that you keep no evidence of hours worked.” But I’m wondering about what the actual potential/likely impact is given that we really, truly believe in less than <40 hours per week. The impact on our bottom line is $0 because we don't pull that crap of paying for 40 hours and expecting 45.

        1. HR

          Wage and hour laws do require that non-exempt employees track their hours (someone some where tracks). The risk is this: disgruntled employee complains to DOL, DOL comes in and says “let me see records,” in the absence of records, they will interview the employee (who of course worked 10-15 hours of OT every week) and the manager and possibly other worker (how much time did employee work? btw…do you track your hours or work OT). The DOL will come up with a number of hours that need to be compensated for the past 2-3 years. They will likely find that other employees need back wages (2-3 years). The company will likely get hit with penalties, etc. for the mistake. It can really add up!

        2. Kira

          HBC, I’m guessing the paperwork doesn’t need to be as detailed as your line workers. It might be as simple as checking a box that says “I worked no more than 40 hours this week” or “I worked ____ hours this week”. Not sure if that would fly, but I can’t imagine they’d need to track minutes unless they went over.

      2. LBK

        There’s no legal requirement that you pay a non-exempt person *only* what they worked, but rather just that they have to get paid *at least* what they worked, including overtime. There’s plenty of salaried non-exempt people that get paid their standard 40 hour/week salary if they work 40 hours or less, and then they get overtime if they go over 40. I was one for a few years.

  38. finman

    One thing a lot of people aren’t thinking about is that many studies have shown that people are more productive working less hours in a day/week. Links to follow

  39. Anon1234

    Does anyone know how this works for part-time “salaried” employees? Two non-profits I’ve worked at has tried to get away with hiring people out on the intern program at a part-time, flat-rate salary. (Say, 20 hours a week), and then giving them an amount of work than could never be done in 20 hours a week. They were required to track their hours, so management was well aware that this was going on. Will they be required to reclassify them as non-exempt (which they always were, it was ridiculous)? Or (more likely), just cut their hours.

    1. fposte

      There’s no exception for part-time. They’ll probably have to do both–reclassify them a non-exempt *and* cut their hours.

    2. Eric

      As long as they work under 40 hours per week, this change doesn’t effect them (other than, perhaps, having to document that they work less than 40 hours per week).

      1. fposte

        I’m assuming Anon meant “exempt” when she said “salaried,” in which case the law would definitely affect them; but it’s certainly possible that she was talking about people who are salaried non-exempt, in which case you’re absolutely right.

        1. Eric

          How so? As long as they are under 40 hours, the overtime law doesn’t come into play, so this change wouldn’t effect them.

          1. LBK

            In this case it’s not about the overtime aspect of being non-exempt, it’s about being paid for at least as many hours as you work. Right now it sounds like they’re getting paid a flat salary based on a 20-hour work week but actually working more than 20 hours; if that salary is under the new $47k threshold, the law will immediately classify them as non-exempt, so they’ll have to start getting paid based on time worked.

              1. For What It's Worth!

                I have never understood the reason to make a person salaried non-exempt. As a business owner it makes no sense. Why pay someone a fixed rate when they are working less than 40 hours. If they are part time, pay them part time. If they can only work 40 hours then any benefit of them being salaried is lost.

                There are cost/benefits to being a salaried worker and these depend on the contract that the employer/employee have (not necessarily a written one but one that is agreed upon) and how it is enforced. In my business there are certain times of the year that require extra time and others that do not. My managers (24k and 32k) put in extra time at those points but they are also paid the same salary during the 6 weeks we take off during the year.

                Starting in December they will be paid hourly and will not be paid for the two weeks (they are pissed) that we normally take off at the end of the year. They like the fact that they get the same paycheck every two weeks and that they can set their own hours, which will disappear as I will have them working a fixed schedule to ensure that I am not violating the law or having them trying to sneak in extra time and not reporting it. Both of them have asked if they could just keep the current system and they would just report 40 hours. Wish I could but adults are not allowed to make contracts without the government interfering as the government believes we are all children that have to be taken care off. Boy I miss the days of handshakes and where one’s word was their bond.

                Today one of the managers left during the day for a doctor’s appointment (she is undergoing treatment for a chronic neck problem) and we pay her for the day even though she only puts in 5 to 6 hours that day (and every Wednesday for the last 4 months). Starting in December she will be hourly so she will no longer getting paid for the full day.

                Overall I predict that middle management will mostly disappear in the next couple years as there is no clear path, no benefit to the company to promote and bring up people through management. The people at the top will retain all the management duties that they would normally test someone coming up the ranks with. Being a salaried employee is where one becomes valuable to a company, an hourly employee is a replaceable cog and it makes the best business sense to get them cheaply as possible.

          2. fposte

            Sure it will. Employees moving from exempt to non-exempt will have to track their hours, their pay for weeks with holidays will change unless their employer chooses to cover it, and they will have to make sure they don’t work over 40 hours unless they have permission or risk losing their job. They’ll also require different paperwork and reconceptualization of the work of their department, which will affect what it is that they take on.

            It’s not the end of the world, but yes, moving from exempt to non-exempt is a change.

            1. Eric

              They will only have to track that there hours don’t go over 40; holiday pay is at the discretion of the employer; and I don’t know what you mean by paperwork and reconceptualing the work…the work would stay the same. All that changes is whether they are exempt from minimum wage law and the overtime law if they go over 40 hours. Anything else is because the employer is adding things, not because the law requires it.

              1. fposte

                I’m not sure what you mean by not having to track hours–if people are paid by the hour, the employer needs to know how many hours they’re working, even if they’re not getting overtime. We track non-exempt hours, as do most workplaces; we will therefore require newly non-exempt employees to track hours.

                I get what you’re saying in that some of the changes aren’t explicit in the law, but they are likely changes nonetheless. I think ultimately it’s for the good, but it’s likely to be a wrench around here, and I’m going to have to cancel some things and take over others.

                1. Eric

                  Oh, you are saying that they are going to switch them from salaried to hourly? If so, then yes things will change. But nothing in the law requires them to switch someone from salaried to hourly, so I’m not sure why they would make that switch because of this.

                2. LBK

                  They would effectively need to be switched from salaried to hourly because they’d need to have a calculated hourly rate, and they’d need to be paid a minimum of that rate per hour.

                  A non-exempt person can be paid *more* than what they worked, but they can’t be paid less. So if you only work 15 hours and your normal week is 20 hours, your employer can still choose to pay you for 20 hours if that’s your “salary”. But if you work 25 hours, they can’t just pay you the same as you’d make for 20 hours if you’re non-exempt.

                  IME salaried non-exempt people kind of just go on the honor system if you’re working 40 hours or less (or whatever your standard amount of hours is) and only submit time cards if you’re working over your standard amount (whether that’s over 40 hours or not – that only changes the amount you have to get paid for those hours, not whether or not you get paid for them at all).

    3. Kira

      Let me try to untangle this.

      Currently: Employees are paid, let’s say, $25,000 a year. They’re official schedule is 20 hrs/week, let’s say that’s 1,000 hrs/year at $25/hr. They actually put in 30 hrs/week, let’s say 1,500 hrs/year. Their de facto pay is $16.66/hr. It doesn’t seem to matter whether they’re exempt or non-exempt because they never work overtime (over 40 hours/week). They’re paid on salary, so the number of hours they work doesn’t affect their paycheck.

      New situation: They’re now definitely classified as a non-exempt employee, because they don’t meet the salary threshold. They can still be paid on a salary basis, meaning the number of hours they work won’t affect their paycheck unless they go over 40. They still don’t get paid overtime, because they still never work over 40 hrs/week. There’s no need to change their pay or their hours.

      Maybe you’re thinking that any work over their 20 official hours was overtime? Or maybe I’m underestimating how much extra time is being required, and they’re actually working 40+ hours per week?

  40. Bryan

    I have an ongoing question (er, series of related questions) about this that I’d be grateful if anybody can point me to a resource for… I’ve researched to no avail. If an employee is part-time, non-exempt and salaried, how does the law deal with pay for extra hours under the overtime cap?

    Hypothetical: I make $20k (this is lower than the already existing cap). My employer pays me an annual salary, and I am supposed to work 30 hours a week. If I work 35 hours one week, should I be paid for the extra 5? And, if so, how is the amount determined? Salary/52/30 per hour would make sense, but does the employer need to have already stated that for it to be official? What if the set number of hours was never officially agreed upon?

    1. Bryan

      Looks like my question was mostly answered in the comment above, although if anybody has a source for how exempt status applies to part-time employees, I’d be grateful. Almost everything I’ve found on various sites and from the DoL itself talks strictly about the 40+ hour overtime requirement; I haven’t found anything “official” that speaks of a legal requirement to pay the 30-hour salaried employee in my hypothetical for the extra 5 hours.

      1. Pwyll

        You’re probably having trouble finding anything official because under Federal rules there is no legal requirement to pay the extra 5 hours.

        Unless there’s another state law that applies to you, your $20,000 salary covers all work you perform in a given week between 0.1 hour and 40 hours. Your 41st hour, and each hour after that in a given week, will need to be paid to you at a rate of 1.5 times your regular rate, which is your net salary that week divided by the number of hours actually worked that week. See the last entry in this link below:

        https://www.dol.gov/whd/stateandlocalgovernment/ca_tutorial/media/OT%20Examples%20Final.htm

        1. Pwyll

          Oops. Your regular rate would be your –gross– weekly salary divided by the number of hours actually worked that week.

          And this assumes you’ve clearly been informed in advance you’re being paid a salary at a flat weekly rate.

    2. Eric

      The overtime law does not come into effect if you work less than 40 hours per week. So as long as you are paid above minimum wage for the hours worked, it would be whatever you and your employer agree to.

      1. fposte

        The exemption category still comes into play under 40 hours, though. Bryan’s talking about non-exempt, so it doesn’t matter, but part-time exempt people who are paid under the threshold will have to either get raises or become non-exempt.

    3. LBK

      If you’re non-exempt, then yes, they have to pay you for the extra 5 hours at whatever your hourly rate is. That’s irrespective of the change – that’s true with the current laws as well, where non-exempt employees have to be paid for at least as many hours as they’ve worked.

      1. Kira

        No, she’s salaried, not hourly. Salaried means they don’t tweak your pay from week to week.

        In this case, if she works 28 hours, she gets paid X. If she works 35 hours, she still gets paid X. If she works 41 hours, then overtime regulations come into play and she could get X+1.5 pay for the last hour worked.

        Rather than extra pay, she could talk with her supervisor about getting flex time to make up for the busy week.

    4. ILurkALot

      >employee is part-time, non-exempt and salaried

      Non-exempt = paid for every hour worked, paid overtime for hours worked over 40. Yes, if you work 35 hours, you’d need to be paid for every hour worked. Your normal “salary” may reflect 30 hours of work, but it can be modified if it’s less and should be modified if it’s more.

      1. Eric

        Non-exempt does not mean you need to be paid for every hour worked. You can be non-exempt and salaried. You need to be paid extra for more than 40 hours per week and make at least minimum wage per hour. That is all the law requires.

        1. fposte

          Non-exempt does indeed mean you need to be paid for every hour worked. It doesn’t mean you need to be paid *only* for every hour worked, but you can’t work an unpaid hour.

          1. Eric

            That’s simply not true. See https://www.dol.gov/whd/overtime/final2016/faq.htm#G10
            10. Q. Must employees earning below the new level be converted to hourly pay?
            No. Nothing in the FLSA or in the regulations governing the white collar exemptions requires employers to pay overtime-eligible employees on an hourly basis. There are millions of salaried employees (white and blue collar alike) who are legally entitled to overtime pay under the current regulations.

            1. Ask a Manager Post author

              But that doesn’t negate what fposte is saying. You need to be paid for every hour. You can be paid for hours you didn’t work (salaried non-exempt, if you work fewer hours in some weeks) but you cannot not be paid for every hour.

              1. Eric

                If you normally work 30 hours per week and have a salary of $500 per week, your employer would not be required to pay you more if you work 35 hours per week. So non-exempt employees can work extra hours without being paid extra, as long as they stay under 40 hours per week.

                1. LBK

                  I’m very confused as to how this is true. Doesn’t non-exempt by definition mean you have to be paid for every hour you work? Unless we just assume your hourly rate adjusts every paycheck so that you make the same amount regardless of the hours worked (up until 40 hours when OT laws kick in)?

                2. MaggiePi

                  LBK, as I understand it non-exempt does not in fact mean you have to be paid for every hour you work. Non-exempt means you have to receive overtime for every hour you work over 40/wk.

                3. Ask a Manager Post author

                  LBK: If you’re paid hourly, you have to be paid for every hour you work. If you’re non-exempt but salaried, your salary covers you up to 40 hours. Work less, still get the same salary. (If you work more, then you get overtime, of course.)

                4. LBK

                  Ah, okay, so the law defines a salaried employee’s work week as 40 hours, even if your actual standard work week is only, say, 20 hours. I think that’s where I was getting confused; so your employer might say in your offer letter that you’re getting $30k to work 20 hours/week, but in the eyes of the law you’re getting paid $30k to work 40 hours/week, and if your employer decides to pay you the same for only actually working 20 hours/week, that’s their prerogative. I assume that carries over to calculating overtime, and that your “hourly” rate as a salaried non-exempt employee is always based on a 40 hour week regardless of your actual average hourly wage.

                5. LBK

                  Now I’m curious about the legal definition of an hourly employee. You say that only hourly employees have to be paid for every hour they work; is that a binding self-definition, ie if you decide to make your non-exempt employees hourly instead of salaried in their offer letters, then you lock yourself in to paying them accordingly? Why doesn’t everyone just make all their part-time non-exempt employees salaried? It seems like it would be cheaper and simpler to just hire part-timers at a salary based on an assumed 20-30 hour work week, pay based on that amount and then you potentially have 10-20 “free” hours of work. Is this purely market-driven, insofar as most people working hourly jobs wouldn’t take those jobs if they couldn’t get paid more for working more?

                6. Ask a Manager Post author

                  We’re getting into details that are outside of my expertise here, but I think that it’s not that the law defines the work week as 40 hours, even if you’re part-time, but more that an employer could set it up that way. (But again, at this point I’m speculating.)

        2. LBK

          You can be non-exempt and salaried, but that usually operates under the assumption that you’re working a consistent number of hours per week and it often overpays people who work less than that standard week (because the company only bothers to track hours above the standard week in order to comply with the law, whereas the FLSA doesn’t require them to care how many hours someone works if it’s fewer than their standard amount that their salary was based on).

        3. Oryx

          If you’re non-exempt, they can’t *not* pay you for an hour worked so, yes, it means you need to be paid for every hour worked.

  41. Amy S

    I’m wondering what would be an appropriate way (and time) to bring this up to my manager. I just received a raise but am still below the threshold. I just want to know if they have a plan in place (or have started the process) but don’t want to jump the gun. Only 1 other employee at my office makes under $47K but I believe she is right on the line so it would make sense to bump her up. I’m thinking I’m really the only one who this will affect. :/

    1. lulu

      Do you know if they’re aware of it? I would just send your manager an FYI email with a link to the DOL website. If they don’t know about it, it would be good for them to give them time to figure out a plan.

      1. Amy S

        I believe my boss is aware of it. I was in his office dropping off some documents a few weeks ago and saw the Fact Sheet printed out and hanging by his desk.

    2. Ell

      My plan is to ask my manager about it in a month or so during an individual check-in – once the org has had enough time to figure out a plan.

    3. CS Rep By Day, Writer By Night

      I had spoken to my manager about this a month or so ago, and she had no idea how the company would be handling it. She said not to expect word until it actually happened (I think she was under the misconception that it wouldn’t fly in the first place), so this morning I sent the the DOL link to ask her to look into what corporate has in mind. I have a performance review on June 1st, and even though I don’t expect a plan to be in place, I told her it would be nice to know which way the wind is blowing by then.

  42. Anon306

    What if I am over the threshold, but my counterpart (who makes less than me) is not- will they make us both hourly? Can the same position be both exempt and non-exempt?

    1. Eric

      I don’t see why the couldn’t, but I imagine it would be a pain, so that they probably wouldn’t.

    2. ZSD

      Well, the salary threshold isn’t the only test for whether you’re exempt. Once you meet the salary threshold, there’s also a “duties test.” So if you’re over the threshold *and* your work meets the criteria of the duties test, then yes, I think you could be exempt when your counterpart isn’t. But if you don’t meet the duties test, then neither of you should be exempt. (If you *do* meet the duties test, then your employer might just decide to give your counterpart a raise so you’re both over the salary threshold and exempt.)
      (And to clarify, they wouldn’t have to make you hourly if you became non-exempt; you’d still be salaried, just non-exempt.)

  43. ZSD

    I think it’s important to point out the positives of this law! The discussion here at AAM has mostly focused on possible negatives (many of which I think are unlikely). Here are the positive effects of the change:
    -Some people’s employers will just give them raises to keep them exempt. This means their pay increases.
    -Some people will keep the same salary and keep working the same number of hours, meaning they’ll get overtime pay. This means they get more money.
    -Some people will keep the same salary but no longer have to work more than 40 hours per week. This improves their work/family balance.
    Overall, this change is estimated to help over 12 million workers! I think it’s great, and I wish the AAM community weren’t so down on it.

    1. Ell

      I’m not going to lie. I panicked when I read about the proposed change a couple of weeks ago – I’m far enough from the threshhold and don’t really work too much overtime so I’ll likely be re-classified and lose flexibility I’ve (I can come in whenever I want between 9 and 10, take time off to run to the dentist whenever, and leave when I feel my work is done). Because lots of employers don’t have a plan yet, and it has the potential to impact the day-to-day for so many people I think it makes sense that people are a bit worried.

      As someone said above, once the dust settles I think it will be a good thing. Gotta let people wring their hands about their own situation first though.

      1. Zillah

        Just a point – being non-exempt doesn’t mean that you can’t come in whenever you want between 9 and 10. It’s entirely possible to have a non-exempt position with flexible hours. You will lose some flexibility, but it’s not a given that you’ll lose all of it.

        1. Kira

          What Zillah said. Depending on your employer, you might be just fine. As long as you are tracking (to prove you’re not going over 40 in the week), nothing about the law means that you can’t have flexible hours. It might be a little bit of an administrative hassle, though.

    2. fposte

      I don’t think, overall, that people think the change is a bad thing–it’s just that a lot of the AAM community is in brackets where the change is going to be a challenge for a bit.

      1. MaggiePi

        This. I’ve probably come across very negatively and I don’t mean to.
        I do think long-term this adjustment is good and necessary in a lot of ways.
        I also think this will be a challenging and possibly painful time for some while it all shakes out.

        I also don’t want people to read this change and think, “Yay, I’m going to make so much more money after December 1st!” and have it not come to pass because the business adjusts in other ways.
        I know people who may feel like they could make financial commitments (like a new car or higher rent) thinking they will have this new extra money coming in when they may not. Certainly, if their employer makes choices that they don’t agree with, they can leave. They may have new and better opportunities and find a new job that pays better and balances better and is great in 100 ways (and I hope so!), but that’s not guaranteed and certainly not by December 1st.

        1. ZSD

          Thanks, both. Maggie, that’s a great warning; I hadn’t thought about people possibly making big financial commitments in advance of seeing how this actually plays out for them. Good point!

  44. JoAnna

    I’m very happy about this. My husband, a programmer, is in this category so it’ll be interesting to see what his employer will do… he thinks they they’ll raise his salary to be over the minimum, but I think they’re just going to start making him track his hours so he doesn’t go over 40 in a week (which would be good, too — same pay, but he’ll have more time at home). He works for a school district so I doubt they can afford to raise his salary or pay him overtime.

    He’s planning on job searching soon anyway in hopes of earning a higher salary, but in the meantime it’d be nice for him to have more time at home to do the job searching!

  45. Silver Radicand

    Hm….I doubt I’m going to get a 33% pay raise…and yet, based on what others describe here, I feel like I have the qualifications to deserve it. Then again, my Master’s degree is unrelated and the valets I manage are near minimum wage. I dunno. I feel like I’m just going to lose my freedom to schedule myself.

    1. Kira

      My impression is No. It’s based on salary, not benefits (like profit share, 401k match, healthcare, gym, free lunch, etc.)

  46. Laura

    Higher ed employee checking in. I am STOKED about these changes. I am well below the limit, so I won’t be getting a raise. But I have no problem tracking my hours if that means I am guaranteed overtime pay for when I work over 40 hours (which happens a lot during the school year).

    1. EJ

      SAME! I work in Higher Ed, too! I do after work Information Sessions and manage a prep course for a standardized test, which we do a weekend course (8 hours each day on Sat/Sun) every few months. I’d totally rather get paid for the overtime, than taking a day off as “comp time”.

      1. blackcat

        Uh, not to worry you too much, but if you do a lot of “teaching” like what you’re describing, you could still be exempt. Depending on your duties, they may not need to pay you over time if you are paid as much or more than entry level instructors. Link to follow.

      2. Meghan

        I also work in higher ed, but don’t see my employer paying me overtime any time soon. There isn’t money for overtime now for the existing non-exempt employees. Why would there be money for it now?

      3. Sophia Brooks

        When I was hourly and did those sorts of things, the expectation was that I would manage my time to come in under 40 hours that week (so taking 8 hours off the week before I needed to work a weekend).

        1. Laura

          I’m hoping that this will be how things pan out for me! I don’t mind working nights or weekends when there’s stuff to be done, but I want to be adequately compensated with money or time.

  47. EJ

    Well, well, well… Guess whose weekend just cleared up for that summer weekend course I was too busy to monitor…. ;)

    1. MaggiePi

      If it’s this summer, this new rule won’t help you at all. It doesn’t start until December 1. Sorry!

  48. burnout

    My employer had some staff members who were being paid as salaried exempt but should not have been…. he was bending the rules so he wouldn’t have to pay them overtime. All the news about these changes scared him, so he changed them to hourly, limits them to no more than 3 hours OT per week and recalculated their base pay so that they HAVE to work 43 hours to get the same amount they were used to. They are PISSED because basically…. they have received a pay cut, and are unable to complete their work in 43 hours.

    I am the only exempt one left and I qualify for the exemption as a manager. I’ll get a slight pay raise by this — unless he decides to make me hourly, too, and then lowers my base rate and limits my OT. If that happens… I’m outta here like a flash.

    1. fposte

      I’m not clear on how they’re getting a pay cut–they were working 43+ hours a week for, say, $30k before, and now they’re working 43 hours a week for $30k?

      1. Juli G.

        It probably depends on how consistently they had to work OT. If you were only working 5 hours OT 12 weeks of the year before to make 30k and now you have to work 3 hours OT every week to make 30K, you more than doubled the extra hours. If you worked 6 hours unpaid OT regularly, you come out ahead.

        And if you get paid vacation, you would get a very small pay decrease if you figure you would struggle to work 43 hours in a week you took a day off.

        1. fposte

          She said they can’t get their work done in only 43 hours a week, so I don’t think that’s the situation.

          I mention this because I think a lot of people are considering a drop in how their hourly rate would be calculated to mean an overall pay cut. And I think most of the time it won’t.

          1. burnout

            I should clarify that the biggest part of why I personally disagree with how this was done is because these are loyal staff members who have been here for 5+ years and are excellent at doing their jobs. Most weeks they put it 43+ hours, depending on the workload and what needs to be done. There are occasions when work is slow and they log 40 hours. My recommendation was to convert their salary to hourly as a straight 40 hours and pay them OT as needed to do the job, because they are hard workers and can be trusted to not game the system and rack up unwarranted OT. I got shot down.

            I just don’t think it is a great way to treat really good, loyal employees.

            1. Chameleon

              Yeah, I think your employer is shooting themselves in the foot, here. Then again, if he was cheating them out of overtime before (by misclassifying them) he’s not exactly the best person to work for in general.

            2. Kira

              If the employer is limiting overtime to 3 hrs/week, it sounds like they think more than that *would* be unwarranted.

              If that makes the workload too high, maybe the team could look at some of Alison’s articles about negotiating workload?

    2. Observer

      If the not finishing the work goes on long enough, SOMETHING is going to have to change. That’s the reality.

      Also, now that they are limited to 43 hours per week they have more of a chance to find something else, or get the skill they need to do that.

  49. Juli G.

    In case anyone is unsure (and I personally received this question), if you are non-exempt and make more than $47,746, nothing changes for you.

  50. I Feel Like This Is Gonna Hurt

    My husband’s in media, and I feel like this isn’t going to go well for him. I think he makes a decent salary for what he does, and he’s $8-10k below the threshold. And there’s a LOT of 40+ hour weeks involved across the board in media.

    To be clear, my husband is the sports director for a “smaller” town group of stations. But, the hometown HS is big enough to be in the biggest athletic class in the state. For them to compete with equally sized schools, it can be a 3-4 hour roundtrip drive. That, plus the length of the sporting event(s), and that’s easily 8 hours right there, which means hardly, if any, office hours that day for my husband. And that can be three to four times in a week in the really busy season.

    I’m just not really thrilled with this, and I don’t see at least 5-7 people at the radio group getting $8k+ raises.

    1. KR

      I’m also in PEG media and I’m thinking about how this will affect my job too. Being part time, it can be a struggle to fit everything in 29 hrs because if an emergency happens with the station or we need last minute coverage for an event, there goes my time for the week no matter if I had other stuff to do or not. I’m hopefully going to be full time soon, but even then media can be time consuming and unpredictable.

    2. Kira

      Maybe he could inquire about flex time during the busiest sports seasons? Say he’s working a 10 hour day every time there’s a game, and there’s 4 games a week. That adds up to his 40 hours, so they might give him a 3-day weekend to keep it below? Or they might just pay overtime during the busy season?

      1. Elizabeth

        What about public school teachers that are currently exempt under the Learned Professionals exemption – does the new salary threshold apply?

  51. Lillian McGee

    Did I read the part right that said lawyers/doctors/teachers won’t have to meet the salary level to be considered exempt? So if I have an attorney with a 45k annual salary who works more than 40 hours after Dec 1 they are not eligible for overtime?

    1. MaggiePi

      Alison, can you chime in on this?
      My understanding is that they would need to meet *both* the salaried exemption and the duties exemption. So lawyers/doctors would meet the duties test, but if they don’t meet the exempt salary minimum, yes, they would get overtime.
      Teachers, however, are there own separate thing altogether.

          1. MaggiePi

            I thought the $455 per week listed on this sheet was precisely what was changing though. Aren’t the “Creative Professional” and “Learned Professional” exemptions what we call by the “duties test”? I was thinking they had to meet both, like Clever Name said in another comment.
            Or I’m just confusing myself.

            1. MaggiePi

              Okay, so I see here on https://www.dol.gov/whd/overtime/final2016/faq.htm#8 in the first section, #3 that it says:
              “Certain employees are not subject to either the salary basis or salary level tests (for example, doctors, teachers, and lawyers). ”
              I would really like them to expand on that. Why would those three not be subject to these tests?

              1. Ask a Manager Post author

                It’s because they’re assumed to be engaging in work “requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment” — which isn’t the type of worker the law was designed to protect against exploitation/abuse.

                1. MaggiePi

                  I partly get that, but it seems like that’s what HCE is for too.
                  If the idea is that of course an “advanced knowledge” job will pay more than the threshold, then what would be the harm in applying the threshold since in that case it would be easily met?
                  Sadly, I suspect this is more a result of employer industries with powerful lobbies. BigLaw doesn’t want to pay its new grads real money for the crazy hours they work.
                  (I know this goes way back in the FLSA and isn’t a new change, but it majorly impacts a partner industry to my industry and it appears really inconsistent of the FLSA drafters/editors.)

                2. fposte

                  @MaggiePi–I think you’re right about the lobbies, but that’s always been true, hence that quirky list of industries, like sugarmakers, that aren’t factored in.

                  Laws are always a compromise.

                3. MaggiePi

                  Yea, always been true and sadly probably always will be. I’m just feeling extra frustrated about it today.

            2. fposte

              Scroll down farther on the sheet to see the section explicitly on doctors and lawyers. I did the same thing :-).

              1. De Minimis

                I wonder if that’s related to the overall bias regarding accounting as a profession. One of my profs said accounting was the “stepchild of the professions,” because it doesn’t require any type of advanced degree. Of course, teaching doesn’t either, but working in education kind of implies some level of academic rigor.

                1. Zillah

                  Depends on what kind of teaching you’re doing. There are certainly places where you need a master’s (or need to get one within a certain period of time).

      1. fposte

        Oops, you’re right–my first source phrased it in a way that made it sound like that was just for the creatives.

        1. fposte

          Okay, I’m finding contradictory information now. So I’m going to just go with “I dunno.”

        2. Ask a Manager Post author

          I might not be following the threading correctly here, but teachers, doctors, and lawyers are all exempt from the salary basis test. See my link above!

          1. fposte

            Yeah, that was on me–I got confused by the top section on that page and didn’t read down. Sorry, lawyers, you lose.

    2. Megs

      All credit to our awesome host, but there is a wrinkle to the lawyer rule that hasn’t been identified here yet, because some types of lawyers absolutely are subject to overtime rules (*waves*). Reading the fact sheet linked below, the doctor/lawyer exemption appears narrower than the teacher exemption in that you have to be “actually engaged in such a practice” and a “bona fide practitioner[] of law”, whatever that means. When I’ve worked for law firms doing document review on a contract basis I absolutely have to have a valid license but am also subject to overtime – and they are understandably incredibly strict about us not going into OT unless the client approves it, so it’s not like they’re doing this out of the goodness of their hearts. And we absolutely get paid more than the prior salary threshold, so there must be something else at play here.

      1. Megs

        Side wrinkle: certain types of legal employment is apparently also one of those few situations where FLSA doesn’t apply at all. When I work directly for a law firm reviewing documents, I’m subject to a 40 hour OT rule, but when I work for an agency doing the same thing, I’m only subject to our state’s 48 hour cap.

      2. Megs

        Clarifying wrinkle (I guess I could have googled before posting instead of after): whether contract document review work is covered under the FLSA is currently being actively litigated, but the winds (and the second circuit) appear to be blowing in the “yes” direction. So I guess the answer to “are attorneys covered” is “no, unless they’re doing contract document review, in which case, maybe (but the issue at hand is duties, not salary).”

  52. KAM

    So, I’ve seen discussions about higher ed, does anyone know how this might affect K-12 teachers? Many teachers in my district make above the 47k number, so it won’t affect them, but I’m wondering if my district will be forced to either raise the entry salary (which is around 37k) or if teachers that are below the limit on the pay scale will be forced to track hours. This job would be literally impossible to do in 40 hours a week.

  53. Juli G.

    One other negative is that if an employer reduces base pay to compensate for projected OT, that negatively impacts anyone taking vacation benefits. Or holiday weeks. Ugh.

    1. misspiggy

      It should be possible to calculate the reduced base pay by taking x amount of expected overtime per week, minus y vacation weeks, from what is currently being earned. It would mean that all vacation has to be the same every year, and possibly that all PTO is expected to be used every year (not sure how the sick leave side of PTO really works in the US).

      Hopefully, if some employers did try to pull this, employees would pull them up on it with the correct figure, or leave.

  54. Gabriela

    This makes me nervous as well. I *just* got a promotion that puts me just barely above the threshold, but comes with much more responsibility. I will have to hire someone to replace me that it looks like will have to make close to the same salary with fewer responsibilities that will report to me OR hire someone who will not be allowed to work overtime, which will double my own overtime. This is kind of putting a damper on how excited I was about this promotion.

  55. BookCocoon

    I work in university housing and I wonder what universities are going to do about live-in staff. Average salary in the U.S. (I just looked this up a couple days ago) is about $31,000 where room and board is included, $37,000 where it’s not. I don’t know how our staff would even begin to track their hours — so much of their work is just being physically present among the students, hanging out in the hall lobby, and so on. They all check e-mail on their phones off and on throughout the day. I understand the point of this law, but it seems so incompatible with this kind of work.

    1. Anxa

      Yeah, my only salaried job was as an RA. 20 hours of work, but then there’s so much of your extra time that’s spent just being an RA.

  56. Viktoria

    One thing I really want to stress for people worried about tracking hours – it’s not hard! In my previous job, I was salaried, non-exempt, and earned OT most weeks. I tracked my hours on a spreadsheet and sent it to the office manager weekly – it was a remote/traveling job with a ton of flexibility. I had on-site hours during the day, and other work I could do in the evening, on the plane, on the weekend, etc. It probably took 5 minutes a day to note my hours worked.

    Just wanted to point this out for the people who are worried about having to punch in and out. And for employers! For employee who are accustomed to managing their own time and having some flexibility, there’s no reason to make them use an official time card- digital or analog. Tracking your own hours is perfectly legal and can simply be added as one of the job requirements.

  57. Christie

    I make $55,000 right now in a salaried, exempt position with a pay range of $35-55,000. My employer told us that the law requires that we all go to hourly, even if we make over the limit. Does anyone know for sure if the law actually requires that or if my employer would just rather not deal with the complications of having some of us salaried and some hourly?

    1. MaggiePi

      It may be that they don’t want to deal with the complications. Or your duties don’t qualify as exempt, even if your salary does.

    2. Ask a Manager Post author

      That is not true, unless your duties don’t qualify you as exempt (and they’re just realizing/correcting that now). To be exempt, you must meet both the salary test and the duties test.

  58. the cake is a pie

    I have a feeling that my employer is going to find a way to make myself and my colleagues exempt under the “learned professional” exception, especially with that line, “The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment.” (https://www.dol.gov/whd/overtime/fs17d_professional.htm)

    With that in mind, I’m curious about the additional portion: “The advanced knowledge must be in a field of science or learning; and The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.” Do you think this means you need to have a master’s, PhD, or offical certificate? Or could a company find a way to show that any kind of specialized instruction (e.g., training courses) counts as intellectual instruction?

    If it matters, I’m in academia but not in any kind of faculty or teaching position.

    1. i'm anon

      You have to meet the duties test AND the salary test. If you’re not a teacher, you must still be paid over the new threshold to be exempt.

  59. Sophia Brooks

    You know, I am still confused for myself because I am not sure what category “additional earnings-retirement eligible” are- I have a regular salary which is below the threshold, and I get paid extra to teach/make costumes (as you have seen me talk about before). Together I am over the threshold, but I am not sure if that counts as a salary or a bonus. If it is a bonus, it is counting for more than 10%. This is just going to be super confusing.

    1. Eric

      This rule would not prohibit that. It would be up to your employer (as it has always been)

  60. VX34

    The idea that someone could be considered a “salaried” worker at under $25k a year has been ludicrous. That’s next to no money for demanding someone work as many hours as humanly possible.

    I do acknowledge there are probably not an insignificant number of people that may be negatively impacted by these rulings, and that is regrettable. But having to pay someone closer to a living wage for salaried work, or paying them an hourly wage with required time-and-a-half for going into overtime…that’s good business sense in general for the labor force, and for employers whether some of them wish to not admit that.

    I’m hourly, and under the threshold by about +/- $10k or so. I have believed that when I move to a salaried exempt position where I am at now, my pay was going to meet or exceed that threshold anyway, so I personally don’t have to worry. I also feel that they’ll probably raise anyone who isn’t at that level but needs to remain exempt due to their hours…or they’ll make people be hourly and those folks will track their time and get the OT, or they will go somewhere else. I mean. Again, I understand that’s not going to sit well with some people. But for some people, this is going to be a godsend. Those are the people for whom I am happy.

  61. nerviously anonymous

    The “learned professional” aspect confuses me too. I do work that might classify as this, I make judgements using science and engineering principles as a pretty regular part of my job…although it’s an obscure branch of science/engineering, and even though it’s probably 80% of my job there are some random other aspects that are not quite that, and I just have a bachelor’s degree, and it’s in physics, not engineering.

    I am under the salary limit, but just barely. I too, enjoy my flexibility, and I have projects I am charged with accomplishing that I feel our success as a company and my professional reputation hinge upon my accomplishing in a timely and quality manner, that can’t always happen within 40 hour work weeks. But more than that, I’m also young, this was my first job out of school, and my employer IS a bit cash strapped so I know this law could be a financial burden to them. My employer has not yet mentioned it, and I’m a little surprised because usually this kind of thing comes up in our management meetings. But my fear is that because I’m young, was probably too naive about salary negotiation when I started as a intern, (and also female in a technical field…) that I’m the only one at my company whose salary is low enough to be affected by this. If that is true…I think I’d rather not know it. I’m generally happy and know that my wage is low for what I do but comfort myself with the fact that this in general wages are depressed in the area where I live. It’s weird to have external powers force a change in my blissful ignorance. It’s also interesting to me to hear that other folks here have already talked to their employers about this. I am certainly nervous about bringing it up.

  62. Jean

    Will this change how seasonal employees are paid? Currently they are not paid overtime.

    1. Ask a Manager Post author

      It’s only amusement, recreation, or agriculture seasonal employees who aren’t covered by overtime regulations. Other seasonal employees are (and have been under the old law too).

  63. Bridget

    I’m still a bit concerned about the commissions thing. I probably will make about $35-40k this year, including commission. My base salary is mid-20s, which means my commission makes up significantly more than 10% of my salary. Plus, I’m a catering director, so there is really no way to reliably schedule me and it would be a HUGE pain to track all my hours. I’m hoping they just decide to bump me up to the exempt salary and get rid of the commissions thing (heck, or even bump up my base so my commission *should* bring me to the new threshold) but…who knows. I do NOT want to be hourly anymore. That shit sucks.

  64. Gene

    I find it interesting that one of the biggest complaints I see on this and other comment sections is, “OMG! I’m going to have to punch a time clock!!11!!” I’ve been hourly since I got out of the Navy in 1981 and haven’t punched a time clock since 1982 when I left retail.

    While there are unreasonable managers and employers out there, if you have flexibility now, why would it change just because you have to track your time? So long as you keep it under 40 hr/week (and 8/day in CA), come in a bit late/leave a bit early/go see your dentist; using PTOI as you have been prior to the effective date for this.

    1. BookCocoon

      Not everyone has structured hours like that. It’s going to be a huge issue for our live-in university housing staff. They don’t work in concrete blocks of time. Would they record every time they check their e-mail throughout the day? Every time they talk to a student in the hall? Answer a phone call? They go between “work” and “not work” fluidly throughout the entire day, except for when sitting in scheduled meetings.

      1. Anxa

        When does hanging out w friends end and professional development/ a work meeting start?

        How is your staff paid. I recall not paying FICA taxes as a RA; could that make a difference here?

        1. BookCocoon

          Our RAs only receive room and board; I’m not concerned about them. My husband is a residence hall director who makes about $32K with free room and board. He is very distressed about the new rules. A huge part of why he loves his job is the fluidity of it. He can hang out playing video games in our apartment for four hours and have the door open, and ten different students will stop by during that time with questions ranging from 20 seconds to 20 minutes. He can go hang out and chat with students in the lobby and be considered as doing the most important part of his work — building relationships so students feel comfortable coming to him in crisis or when he has to talk to them about their conduct. It’s difficult to say what is classified as “work,” and even if it was somehow clearly defined it would vary wildly week to week, which is exactly how he likes it.

    2. Greggles

      It’s a nightmare for me to track my time. My company changed us last Nov. I don’t work a straight through day. My time entered looks crazy. 515am-530am; 615am-700am 845am-245pm 330-430pm 615-625pm.. Ect. It depends on if I have to get the kid, take him to school, answer an urgent email,take a call in the car answer a call from a colleague. No days ever the same!

  65. Anonacat

    As someone outside the US, this seems like great news (in the long-term) for American workers, but also kind of mind-boggling. My contract says that I work 40 hours a week so that’s what I work. many commenters mention non-profits, from my perspective, it should be even less likely to have to work long hours in such places (which is why I have mostly worked in cultural institutions).
    I can’t imagine routinely working overtime, it would be a breach of the terms of my contract – the former status quo of these US rules seems so clearly exploitative to me. FWIW, We don’t have the ideas of “exempt” and “non-exempt” here.
    Even if there is some pain in the short term, I think this is a long-term gain. Go US Department of Labour!

    1. OlympiasEpiriot

      The whole idea of ‘overtime’ was intended (from workers’ rights negotiators’ points-of-view) to be punitive to the employer for not hiring enough people to do the job in a standard workweek. Of course, that is lost in the mists of the mid-20th century, so no one thinks about it now.

  66. Camp rocks

    Do you know how this affects camp counsellors? They are usually under contract for a minuscule amount, and get tips.

  67. Chloe

    Forgive me for the very dumb question, but does this mean that all salaried employees below the threshold are now hourly?

    1. Ask a Manager Post author

      It’s means they’re non-exempt. You can be salaried non-exempt (meaning you always get paid your base salary from week to week, even if you work fewer hours that week, but you also get overtime when you go over 40 hours).

  68. Adworld

    How does this apply to large companies, specifically marketing/advertising agencies? Time sheets are the norm in these industries– clients are paying for portions of agency fees/ employees in the negotiated retainer . I’m the most junior on my team, same formy art director, yet we still bill the most hours each week, which is beneficial to the agency. Our billable rates are less expensive.

    Seems to me like the requirements to be non exempt are incredibly ambiguous.

      1. Adworld

        How does this apply to large corporations, specifically creative agencies that are client-driven and already meticulous when tracking hours?

        What are the exceptions to this new law?

  69. Disgusted

    My company found a loophole. I work for a retailer where we had a guaranteed salary that was over the old threshold but below the new one, and if our personal sales commissions exceeded that salary we’d make the commission instead. Now they’re changing our compensation to a “guaranteed hourly commission” no matter how many hours we work, and they say we’re exempt from overtime because we’re “commissioned salespeople,” even though our job titles are Store Manager, Assistant Store Manager, or Manager on Duty, and we’re managing stores 10 hours a day, often with no other employees present. That’s what clever corporate lawyers get paid to figure out!

    1. OlympiasEpiriot

      That might not really be a loophole if someone were to complain and the Labor Dept look closely.

    2. VintageLydia

      You (or a group of you) could contact the DOL. The duties portion of the test is as important as the pay portion and if your primary duties don’t qualify, you must be non-exempt. You must pass EVERY part of the test.

  70. MommaCat

    Late to the game, but is the weekly or annual amount more important in determining if you’re exempt? I work at a school (not a teacher), and my weekly rate is above the threshold; as I get two months off over summer, my yearly rate is below the threshold. My guess is that the weekly pay is more important, but it’s an interesting question.

    1. OlympiasEpiriot

      Are you paid every week for 52 weeks (ie: vacations with pay) or do you only get a check for 44 of them?

        1. lee

          Thinking about your question, I would guess weekly pay has to be the determining factor. Consider an employee who makes a salary below the threshold and gets some overtime pay here and there. If that employee quits in June, they don’t take back the overtime salary, do they? And government’s calculate paycheck tax by presuming we get paid our weekly $ X 52 weeks. Not sure if this applies in a contract situation, though.

  71. lee

    I wonder if you can address if the new rules will impact skilled theater workers (like set production and carpenters in NY on- and off- Broadway). Often these very talented craftspeople are paid flat fees per show (such as $1000/month) while working long overtime, 50-60 hours / week. This translates into ridiculous hourly wages; as little as $4/hour for demanding, creative, and sometimes hazardous work.

    thanks!

    1. MommaCat

      I’m pretty that counts as self-employment, which is not covered by the new rules.

  72. lee

    Hi MommaCat
    thanks for your reply & you are right; the flat fee I describe does qualify as self-employment (found this out doing taxes). But other shows hire crew as regular employees and pay per week, ($300 – $400/ week gross is not uncommon) but the actual hours are much longer than 40. When a show opens, for example, crew can be REQUIRED to be on site for 10-12 hours shifts for at least the first week, with no change in pay.

    any insight?

    1. MaggiePi

      Depends if they are listed as independent contractors or employees (and listed correctly at that).
      If they are indeed employees, it sounds like they may be subject to overtime, and probably already were. (Which leads me to think they are listed as ICs. There have been a lot of lawsuits about employees being improperly classified as ICs recently too.)

  73. michelle pickett

    My husband works for a medical facility as a department manager. He has the authority to hire / terminate / train, set raises, etc. He works right at 60 hours each week in his building and that does not count the work he does from home (evaluations, emails, etc.). He does not receive bonuses and his annual salary is 33000. Will this new rule have any effect on him? He has never punched a clock where he works nor has ever received overtime from his employer.

    1. MaggiePi

      His duties don’t matter if his salary is under the new threshold; it sounds like he will be entitled to overtime starting December 1st for any work over 40 hrs/wk.
      Unless he is a doctor, lawyer, doctor, or other exempt profession, which is doesn’t sound like he is.

  74. the cake is a pie

    I’d love to see a follow-up post in a few months or even a year to hear about how people’s employers handled this!

  75. stephanie

    The 10% of the salary level can come from bonuses, incentives, etc… what does that mean? My company gives exempt workers a 10% bonus for the year IF the company reaches a certain net income. Also, are the rules any different for non-profits?

    1. stephanie

      I should add, if it helps, that I work at a Mutual (non-profit) insurance company as a Trainer of CSRs. During class time, typically June-November, I can work up to 45-55 hours a week. I am exempt, and am almost at the salary level mentioned.

    2. Zillah

      IANAL, but it seems like if the bonus is contingent on the company making a certain amount of money (i.e., it’s not guaranteed), it’s not going to count for the purposes of determining your salary. IANAL, though!

      From a couple conversations above, it doesn’t seem like the rules are different for non-profits.

  76. BigPapa23

    Tell me if this will work. Rather then pay my blue collar employee a salary, I give him a low hourly wage and include 25 hours of overtime on every weeks pay, whether he works it or not. I work the numbers out so his pay for the week comes out the same as his salary now. Wouldnt that work out?

  77. Sally

    Can my company require me to work overtime if I’m not being paid overtime (time and a half) pay? My company is currently mandating 5 hours of overtime a week. I had a PTO (paid time off) day which means I would not be paid overtime pay unless I physically worked over 40 hours that week. In order to receive overtime pay I would have to make up my 8 hours of PTO and work more than that to receive time and a half pay. My company is still stating that I am required to work overtime for the week even though I’m not receiving overtime pay. Is this against Kentucky labor laws?

  78. Bowserkitty

    My company finally sent out some communications about this, sort of like a “we’re still deciding what to do until December 1” but there was an interesting note in there about how all part-time and full-time employees who meet the salary threshold “will automatically be categorized as non-exempt” – so I’m now non-exempt, just like that?

    1. Bowserkitty

      For reference, the email didn’t mention a date for the new categorization but it sounds like it’s effective immediately.

  79. Ivy

    Maybe someone can answer this for me. My husband works as an automotive technician and work 50+ hours a week but he gets paid flat rate (meaning he gets paid a certain number of hours per job) not the actual hours he is there so he currently does not get overtime pay. Will his employer be required to pay overtime when this goes into effect?

  80. Scott

    Does this law only apply to companies of a certain size? i.e., a minium of 50 employees or something?

  81. Aaron Roland

    I work for an up and coming pizza chain in Overland Park KS. I was hired on last year as a utility GM and after 4 months moved into the training and development coordinator position. My boss the owner considers my job as admin but what I do is not administrative at all. I am in all the locations training new hire, shift leads and manager as well as I run the new store openings. I am also required to run shifts as a manager when needed. I am in the stores working hands on with the employee’s and performing managerial duties daily. I work 50 hours a week most weeks I work up to 10 hours more and have to go in on my days off for a couple hours here and there. The new store openings are 3 days straight of two training session per day that amounts to 90 hours, plus I have to stay at the new stores for 2 to 3 weeks working more then 10 hour days to make sure the new store is running as it should. I am salaried at $35,000 a year and have never been required to clock in and clock out however I do have to submit a weekly time sheet before payday.
    How do I know if i’m exempt or non-exempt?
    I read online that I can get back overtime pay now and not have to wait until Dec 1st, is that true?
    All the info online about exempt & non-exempt for restaurant managers is conflicting and unclear to me and I felt it best to ask here.

    1. Aaron Roland

      I want to correct something, After the 5 day training session that starts with 3 days in a row of two training session per day and includes the pre-opening day prep and opening day amounts to 90 plus hours.

  82. JB

    Thank you Obama!! Been getting bent over for 20 yrs working 60 hrs a week with no extra pay. My employer keeps getting richer off the blood, sweat, & back of the people that made them rich in the first place. What is fair? Your ass being forced by the gov. to do the right thing.

  83. anonykins

    How does OT work with travel? I’ve accepted a position that requires a lot of both during certain peak periods and pays less than the new threshold, so there will be some changes coming to my pay structure. But if I’m driving two hours between client site visits, and staying overnight in a hotel, how would that fit in if I was all of a sudden nonexempt?

    1. Lia S

      I’m rather curious about this as well. There are days when I drive 5 hours to my first job site, and continue on for a nice, long, 14 hour day. Currently salaried, but under the new salary test….

  84. Aimee Roiz

    I fall under the $47,476 a year. I am in the office Monday-Friday 8am until 5pm. I am required to be “on call” anytime I am not in the office.. so at lunch and after hours all nights and weekends, holidays etc. I may not get a call but I may get numerous ones. Some are handled in a small amount of time while others might take hours. I may have to stop what I am doing.. if I am at a movie, shopping, at a park with my child etc and have to immediately go home and start working… how will they handle my situation? Just knowing that there is always a chance I may have to start working minute to minute is stressful. Anyhow, what are your thoughts on my situation?

    1. Ask a Manager Post author

      They’ll have to have you log all of that and pay you for the time, including overtime if it takes you over 40 hours a week.

      Also, that’s a ridiculous set-up they have.

  85. Brittany

    I am needing some insight, I currently am a VERY (6-8 hours/week) part time salaried employee. Recently, and after being promised no changes until Jan 2017, I not only was moved to hourly but then was given a $6 pay cut effectively immediately. My question is, is this even legal or what options do I as the employee have other than giving a notice and finding a new job?

    1. Brittany

      Side note – I was salaried due to being on call 24/7 and the work remains the same just at a lesser rate. I was also told I am not allowed to work more than 8 hours per week so working more per hour isn’t an option.

      1. Brittany

        And the reasoning for all the changes I was told was due to the new labor law on salaried positions. Which from everything I’ve read, I was exempt due to pay and hours.

  86. Sakura

    My husband works for a major University. Every summer before move in, the housing staff have to attend mandatory training. He worked a full 8 hour shift yesterday, and will do so again today, its the only way to get his regular work week done, that he wasn’t able to do because he is having to attend this training.

    He is told to flex the time… which he can’t do, because he’s working overtime in the first place because there is no time during the week in which to get that done.

    He has been told, next year that he will no longer be salaried, but be bi-weekly. This was in response to this law. I guess what I don’t understand is, why the change? If they keep him as salaried, with this change, they have to pay him over time now instead of telling him to flex his time.

    But if he moves to bi-weekly, they still have to pay him for anything over 40 hours rights? So I guess I’m just trying to figure out why the change?

  87. ntigo1

    Hi there-quick question.

    Does the 47k threshold mean only monetary earnings? For example, my employer lists my “total compensation” as 52k, showing 41k in salary and another 11k in benefits.

    Thanks!

  88. Jeremy

    My company just switched me to hourly but I make more than the $47k threshold. Can they still do that? I don’t work overtime but l’m going yo miss the flexibility of not having to punch a clock.

      1. Jeremy

        Thank you for the response. I need to get clarification from my HR dept also because my checks are for 86.67 hours each period. If I’m getting paid for 80 hours now, that’s essentially a paycut unless they start paying me every two weeks instead, if I’m not mistaken. Either way I’m really not liking this.

  89. Teacher09

    I’m stumbling upon this quite late. I’m a teacher at a private school that pays all teachers less than $25,000 per year. We already clock in and out, and we always work over 40 hours per week, due to conferences and staff meetings. We aren’t paid overtime; however, if a teacher must leave 30 minutes early for an appointment, our time is taken from our benefits. Does this new law apply to private school teachers? This would be beneficial for all teachers at my school.

  90. mrmills203

    what about if you work 50 hours a week and they hired you on a hourly pay but your total year end with overtime is 36k? does that make the employer pay you the same but keep you at 40 hours a week?

  91. Steve South

    I have a question regarding this.

    Can I write a contract that guarantees the employee a certain number of hours a week even if they don’t work the full amount of hours that we write the contract for?

    For example can I guarantee that the employee will get paid for the regular 40 hours, plus an additional 10 hours of overtime a week?

    If so then my manager who makes $36,400 will change to a $10.00 an hour employee with a guaranteed 10 hours of overtime a week and will make the $36,400 a year. As I never have had an employee work more than eight hours of overtime in any one week I am not worried about having to pay them more than the salary amount and I will implement a policy that will prohibit any manager from going over 10 hours of overtimes without written permission upon penalty of being fired. I will be effectively paying the manager the current salary without it being a salary.

    Comments?

  92. Coleen

    Every ceo and board of directors in the country are having meetings RIGHT NOW figuring out how to use this to their advantage. Count on it. It’s how it works. I’d imagine jobs in the $30,000 to 45,000 range will be discontinued to avoid paying them too much. Or salaried employees in that range will be replaced by hourly employees who make less per hour. This will not work to the advantage of the low end manager. It’s a shame… I’m pretty upset about this as I’m a manager in the range listed above. I really doubt my company is going to willingly pay us all 10,000 more per year. They have to protect the bottom line?

  93. ScottS

    From what I am hearing there is a big push to repeal this ruling. Is this something that is going to happen? Myself and 3 other regional Managers are paid about $5,000 below the 47,500 threshold yet we each manage over 30 people. Our employer is looking at making us non-exempt and possibly trying to re-write our job descriptions to avoid either the paid overtime or raising our pay to meet the standard. We each work over 50 hours per week, we also must carry company issued cell phones 24/7 and respond to any emergency or call at any time. Can you tell us which part of the ruling will protect us from these unfair practices?

    1. Steve South

      Scott,

      When I was working IT many years ago the company I worked for informed me that I was expected to work 50 hours a week, certain projects would require that I would be required to work for 3 days straight and that I would be required to carry a pager and answer it within 15 minutes. The job paid 45k and I agreed to the stipulations. I held up my part and they held up theirs. This was the contract and we both agreed to it and neither was made to sign at gun point.

      My question is why to you consider these such things unfair practices? Did they lie to you? Did they say that you where going to get a salary but would never have to work more than forty hours a week. Did they force a cell phone on you at gun point and then threaten your family?

      I am guessing here but I imagine that you happily signed the papers and then all of your friends told you how bad a deal you got. The one you should be blaming is yourself or if they lied to you get an attorney to enforce the the law or maybe next time read the contract and understand what a salaried, exempt person is before excepting the position.

      You say that you are managing over 30 people (which means you are more than likely exempt) but only making $42,500? How much should someone in your position be making? How much are your subordinates making and how much more than them are you supposed to be making? If you are worth more money then get a job at another place that will appreciate you. If you can’t find another place who will pay you more money for your skills then you are probably being overpaid at your current position.

      I hear that the post office is hiring!!

  94. Turning little people into pissons

    I work in a corporate kitchen..red lobster.. they have already cut managers and give them three days off a week..taking us work six days then kicking us out early if we get close to 40. So these salary workers are pretty much getting a raise while we the backbone are getting a golden shower. I have never been so mad and taken advantage of . We keep costs down by doing our jobswhile these managers get free food an extra day off plus the same wait of pay .. they have also stopped giving us raises.. they say it is just them getting ready for this new labor law.. suck this .. wow

  95. Annie Tantao

    Hi,
    I have question on how to convert salary associate to hourly? Is the formulation correct and follow the new rules.
    On their current payment statement. The hours showed 40 hours base, however, 45 to 50 hours are mandatory.

    Hourly rate = salary/ (55 hours*52)

    Thanks.

  96. LALA

    Ours is now done online and management can go in and change our times to whatever they want-I already see this being done. How does this help again??? Cheaters and scammers will always be around.

    1. De

      I check my hours daily, and take a screen shot for my records. If you do this you can make sure they are not altering your hours.

  97. Richard Cowan

    I was recently promoted to supervisor and am paid more than the cap for salaried employees. This question is geared more toward the employees I manage who are paid a “Chinese overtime wage”. My question is with the new overtime rules how would I be able to be for sure if those employees are exempt or not from actual time and a half?

  98. Anita

    I am a full time college instructor at an academic institution. I get paid hourly buy make way under $47,000. Will I get a raise adjustment?

    1. Elizabeth

      No, because it sounds like you’re non-exempt already due to being paid on an hourly basis.

  99. Lonely wife

    My husband currently make a lot less than the 47,500, and is a salary employee. He is a supervisor, his duties include hiring, firing, training, overseeing, filling in, payroll, reports, and other duties. He has been told he will be bumped up to $47,476. Unfortunately they are eliminating his car allowance and annual bonus. He quite frequently works 65 to 70 hours a week. Shouldn’t there be a limit as to how much overtime they are allowed to do without additional compensation?

  100. Amanda Thomas

    I might have missed it in this thread (really long) but what if currently you are salaried and work about 60 hours a week and your employer tells you they are going to move you to hourly and calculate the rate based on your salary so you end up making the same amount but they’re only going to pay you for a max of 10 hours of overtime (even if you still work the 60) Is it smart business or is it still illegal to not pay an hourly employee for 10 or so hours because *wink wink* you still getting your regular salary.

    1. For what it's worth!

      It would illegal to have you work at the new rate and not pay you for the hours. They should take your salary and divide it by 70 which would give you your base rate and then pay you for the 20 hours of overtime.

      If they don’t want to pay overtime they should hire two 30 hour people at a lower rate than you are currently working to even the work ours out.

    2. Elizabeth

      Once you go hourly, your employer must pay you for every hour worked, and pay overtime for every hour worked over 40. If they only want you to work ten hours of OT, then it sounds like you’ll only work 50 hours a week. But if they expect you to work 60, then they have to pay you for 60. Working 60 and only getting paid for 50 is illegal.

  101. Diane

    My regular work week is 35 hours and I make less than 47K a year. Under the new guidelines, does that mean I’m entitled to straight time for hours 35-40 and then overtime pay for hours over 40?

  102. Justin

    I’m very concerned about this. I am a supervisor at my current place of employment, and we make roughly $34k-$38k per year. The rumors going around are that they are going to do the reduction in our “annual” pay assuming for 5 hours of overtime per week (aka i currently make $17.15/hour, i will now make $14.45/hour). The ridiculous part of this to me is that this is a DIRECT deduction in pay. Say all you want that it averages out, but why on earth would I ever take time off of work now?

    Before, when I would take a full week off, I would get $686 for that week, now I will only get $578. I feel like companies who choose this strategy (apparently mine) are being very shady and not really meeting the spirit of the law. I wouldn’t be surprised if our supervisory staff all leaves if this is the decision that is made.

    Our company already has problems with how it values the supervisors, but this is only going to make things worse for my company and I feel very soon I will need to look for work elsewhere.

  103. Wilma

    My husband was making $39k per year last month. Then he broke his foot at work. Shortly after that, the two guys he supervised left for better jobs….. Now his boss “gave him a raise”, but changed him to hourly and reduced his hours to 30 hours per week….. Trying to figure out if this is the bosses way of thinking he’s within the overtime law, or if this is retaliation for breaking his foot…. Any ideas are welcome.

  104. Amanda

    How would On call work? I currently every other week have the phones. Which means a night time cocktail is out of the question this is included in my current salary which is under new threshold. Depends on week I could have one phone call or several. I get that I will have to keep track of phone calls and time. However I am not keen of giving up my night for a “maybe” phone call. So my question is how should employers work out on call if they don’t plan on bumping us up to the new threshold?

    1. Tim

      This. I’m in the same situation and curious as to how this will change. I currently make $100 for being on call 24/7 for one week. It does severely limit plans that can be made as you always have to be ready to work and handle a crisis. My company is calling it a “contract” position now but I’m unsure if this is a fair deal as we don’t have a choice (although they say we do)–someone has to cover the phones.

      1. Karen

        I thought ‘exempt’ meant that we’re salaried, and now under this new rule, professional exempt (salaried) have a required base salary of $43,000. Please help me understand , thank you!!

  105. SICK of it

    This has started for us-they force everyone to clock out for lunch even if you are too busy to even take a lunch-they watch everyone’s timesheets rather than working themselves-quite disgusting to say the least. Send nasty emails to us. Have it set up so you can’t clock in until the exact time your shift starts-I mean not even 3 minutes before. So you have to sit right in front of your computer to make sure you don’t show one minute late or you get the nasty email. This is a company that inspired this law-they use and abuse staff-they are finding ways to still do it. They are bullies and shady-that’s what they do and love it. This hasn’t helped us for sure it’s made our life much worse. Now they send emails out to all staff saying to vote the correct way or this will be forever and the higher ups have expressed their feelings on this.

  106. Roger

    I’m a salaried retail manager. I have not been paid overtime for any hours worked over 40. I work 45 hours a week except November and December. In which I can work 50+. Reading this article I’m confused. If I’m now having to go to hourly with overtime pay. Won’t my company have to back pay me for all the over time the last 10 years? There was except and non except. My company is tight lipped and not saying a word. Although we have a new manager that was brought in as hourly working 47 hours a week. I’m just flat out confused. Talking to my GM/owner about this is like talking about sex with a parent.

  107. Tim

    The company I work for has managers salaried at 50 hrs a week. They have decided to reduce everyone’s base pay so that working 50 hrs will result in the same paycheck. While this is legal it is unethical and circumvents the purpose of the new law. I called my district supervisor and he said I was arguing semantics when I broke down what my base pay was, $900/50=$18 an hr they are telling me they want to give me $16.36 an hr so working 50 hrs will equal the regular weekly rate of pay. I’m only $13 a week below the threshold for the new salary requirement, I was expecting them to just give me a bump in pay. He eventually agreed that they could get me the extra $13 a week, only took 18 minutes. I feel sorry for all of the people that agreed to their new rate that are getting screwed over. I warned some of them about how it was being handled, maybe it’ll turn out for them as well. It sucks knowing your company cares more about the bottom line than its employees.

  108. Patti Couture

    I’m a cafeteria manager who works a 10 month contract and I’m paid only during the 10 months. I make 41,101.00 a year. We were made administrators years ago so they didn’t have to pay us overtime although we are paid hourly. We are told we are exempt so no overtime. Does the new salary rate (47,476.000) affect us? Or are we basically out of luck since we are 10 month employees? Can you help me with this question. We are having a meeting on Wednesday and I want to be prepared.

  109. kim

    My husband is a manager and is currently making $35,000 per year. He talked to the boss about the new change to see if he was going to raise his pay and the boss said what if he just changes his pay to commission and then gives him a bonus to make up the difference to keep him at 35K. Is this allowed under the rule? Since he would be called commission instead of salary?

  110. V

    What is a person makes less than the required amount to be exempt however they are a “supervisor”. Do they have to be getting paid enough no matter the title orole does the title make them exempt regardless of wage?

  111. Snay301

    I’m salary and work 45 hours/wk . Currently I make $40,310.40/yr salary or $19.38/hr. My company now is cutting my pay to $38,188.80 or $18.36/hr and paying me $8.36 per hour for my 5 hours of overtime. (they are calling it sliding scale). It comes out to be same amount yearly. On weeks with holidays and/or vacation I get a stipend to make up for hours not worked so I make same amount of money. How is this legal? It must be or they wouldn’t be doing it. I guess they found an loophole around the new law. They always find a way to screw the employee.

  112. Deb

    Ok, this is all new to me. So, please help me. My husband is a salary worker and makes under 40,000 per year. He works 40 hrs per week and occasionally goes in for an hour or two on weekends with no extra pay. His employer is telling him that he will now have to punch a clock and work 50 hours a week for the same pay due to the new law. Is this correct?? My husband is furious and I think rightly so. Who wants to work more hours for the same pay?

  113. Sarah

    I was just told by my employers about this adjustment from salaried to hourly – I make just under the threshold and work from 9-6 everyday (with an unpaid lunch hour) at a product based start up. I have been trying to do research into the mandatory breaks required but haven’t been able to find any definitive answers so I was wondering if you could help! I’m also wondering if this changes based on if you’re salaried or hourly. Since I am now hourly and am working 8 hours a day is it mandatory for me to have a 30 minute paid lunch break? I would much rather take a 30 minute lunch break and leave work at 5pm than having to take an unpaid hour lunch break and leave at 6. Would love your input!! Thanks!

          1. Sarah

            I was looking at that earlier but am still confused – does that mean that any employee (hourly or salaried) is allowed to have a 30 min paid break if they work 8 hours or more? Or am I reading it completely wrong?

              1. Sarah

                Thanks so much for the help! I work at a small company that has no HR rep so I always find this site so useful :) So I think I understand now – as salaried you get a half hour lunch but you’re not paid overtime so it’s not really standard to be counting the hours – but since I’m now hourly if I work from 9-6 I could conceivably ask them for that mandatory break and leave at 5 – or they would have to pay me for 30 mins of overtime if they did want me to continue taking an hour lunch.

  114. Chuck Butler

    The Company I work for has required me to work 8 1/2 hours per day(42 1/2 hours per week) & they paid me a
    salary with no overtime pay & my pay stub has always stated that I have worked 40 hours & now they are reclassifying me & are figuring my hourly pay on 42 1/2 hours in order to keep my pay the same which will effectly reduce my hourly pay. So, instead of my hourly paid being determined by a 40 hour work week as stated by my pay stub my hourly pay will be reduced for the first 40 hours to account for the 2 1/2 hours of OT. My take on this new rule means that I will still work 42 1/2 hours a week at the same pay(decrease in regular pay to compensate for the 2 1/2 hours of over time they will pay me). Sounds to me like a pay cut.

  115. JC

    My employer just reclassified me from exempt to non-exempt, even thought go my annual salary is above 48k. Their reasoning is that they’re changing by my job title to more accurately relflect my job duties. The claim is that some people who perform similar job in my position throughout the company have a more tasked based position than decision making, disregarding myself and others as individuals and basing our classification on we actually do. My concern is two fold. I lose flexibility in the way I work and that this might be a preemptive move to, moving me out, and hiring someone wth less experience for less pay.

  116. sole

    Does anyone know – if an employee group previously classed as exempt has some workers now below the salary threshold (but the duties remain the same), can an employer decide to classify the entire group as non-exempt even though some of the workers pass both salary and duties tests? Reasons for this could include team cohesion, workflow, management balance, etc. I’m not clear whether an employee who can be classified as exempt MUST be classified as exempt, as being classified as non and paid hourly is to their favor (as far as being eligible for overtime pay).

    Do the classification requirements flow both ways? Thanks for any input!

  117. Kevin

    I was salary at 35000 a year and it was based on 43 hour week at 16.43 an hour but I would work 60. Now because of this new law they have moved me to hourly pay but I will be making 12.35 an hour. Is there anything I can do?

  118. Ask a Manager Post author

    I’m getting a lot of questions here that are answered in the post itself or in the comments, so I’m going to ask people to read those first before posting new questions for me to answer! I’ll continue to try to answer questions that haven’t already been answered though.

  119. Renee James

    Does this sound legit? I am currently a salary employee at 35K. I’m being told that under the new law I’ll be paid ‘something’ up til 40 hours and then half time for anything over 40 up til 45 and OT after 45. But I’m still required to work 45 hours to get my full “salary” (which is NOT becoming hourly). If I don’t work 45 hours, then my “salary” will reflect the hours not worked. It seems very fishy to me and misses the intent of the law.

  120. Mama Rose

    Wow! We received word last week that we were being switched to non-exempt. After reading the threads here I’m going to have to include my employer in my Thanksgiving prayers. We were told no change in $ amount earned, no change in hours per week, 37.5. And overtime is available. But, the first 2.5 hours would be at straight time since O/T starts after 40 hours.

  121. D.Rogers

    has reviewed your position with these legal rule changes in mind and has elected to reclassify your position as non-exempt. As a non-exempt employee, you will be asked to track and record all hours worked, and you will receive overtime if you work more than 40 hours in a workweek. In the month of December, you will continue to receive wages for the current pay period; however starting January 1, 2016 you will begin to be paid in arrears. This means you will not receive a paycheck on January 15, 2016. Please plan accordingly for this payment schedule change.

    So this means that I will only receive half of my salary for January 2017. She tried to call it arrears but what it really means is they are holding a paycheck for January.

  122. Ray

    This is meant to help those who get paid a low wage to work as many hours as your employer wants you to. For example, a person working 60 hours per week making 33k per year is being taken a vantage of. Not to mention when they have to work more hours. Many times a salary employee makes less than minimum wage if you figure it out by the hour.

  123. Lorraine C

    Please note that a federal judge has put a halt to the new FLSA rules!!! I am really scared that now my fiances’s employers will take back the money that they have already given him to bring his annual salary up to $47, 560. This is a Texas judge who made this injunction against Obama’s executive order. To say that I am depressed would be an understatement. This injunction in my opinion seems like obstructional litigation.

  124. Angie

    I manage a group home for adults with Intellectual disabilities. It’s a non-profit agency and this law really worries me. They won’t be able to afford the increase and my fear is that they will make me an hourly employee and pay me at a lower rate with the anticipation that I will work overtime. Why should I have to work more hours just to make what I already was?

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