the new overtime law means I’ll be earning the same as much more junior people

A reader writes:

Last year I used a job offer to negotiate for a promotion from teapot coordinator to teapot manager, and a pay raise. My new salary happens to be just above the cutoff for the new overtime laws – $24 over it, to be exact. I recently found out that two very new employees at the coordinator level (who hardly ever work overtime, and have had serious performance issues) will NOT become hourly employees starting December 1, and are both getting substantial pay raises that puts them on the same level as me, salary-wise, though they are below me rank-wise. This frankly is making me very angry and demoralized. My performance review will be in December or January; however, our review schedule is such that I will not be made aware of any merit-based salary increases until end of February.

Is there anything I can do to address this with my supervisor or our VP during my review, or with HR? Or should I just wait and hope that they evaluate my salary and make it more equitable? For the record, I manage two critical functions of our department and have a great deal more responsibility as a manager than I did as a coordinator, and I feel it is important that my pay reflects that.

This is tricky, because normally you’d of course want your pay to reflect that you’re contributing at a higher level than people who are in positions below yours and/or who aren’t performing well. But companies that are having to raise a bunch of people’s salaries to the new exempt level are in the midst of taking on new salary expenses that in some cases will be pretty significant, which means that it may not be the most practical time to ask for a bump yourself — particularly when that bump wouldn’t be about you now performing at a higher level than when your salary was last set, but just about wanting to get paid more than someone else. (To be clear, wanting to be paid more than someone who contributes less than you is totally legit; it’s just not the most compelling argument to a company that’s suddenly shouldering significant new payroll expenses.)

I do think you can broach it, but your approach needs to be shaped by that context. I’d say this: “I know we’ve had to raise the salaries for coordinator positions. Can you tell me anything about plans to adjust managers’ salaries so that they’re not at the same level as the coordinators?” If you hear that there are no such plans, then say, “Is that something we can look at, since the jobs have such different levels of responsibility?”

But the reality is that the money just might not be there right now. Plus, if the request would take you above market rate for the work you do, they’re not likely to do it — so that may mean waiting until there’s been time for the impact of the new overtime law to shake out in the market.

Meanwhile, try to talk yourself down from being angry and demoralized. Your company gave your poorly-performing coworkers raises because they were required to do so by the new law; it’s not a reflection on you.

{ 142 comments… read them below }

  1. TotesMaGoats

    Our HR office recently gave a presentation about how the law will impact people and one thing they mentioned was pay compression. That because roles X were being changed to salary A then role Y needed to be changed to have equity. Or something like that. You could ask about that as a way to start the conversation maybe.

  2. Mike C.

    Furthermore, even if these particular employees suck, the employees in general that had been made salary (and worked such hours) were severely underpaid for a long time.

    1. TCO

      Certainly many workers under the new threshold were exploited by employers and worked a lot of overtime… but we don’t know that the workers in OP’s office were underpaid. Plenty of jobs in many regions of the country pay under $47k and it’s a fair market rate for their work (and livable wage). It doesn’t sound like OP’s coordinator colleagues worked much overtime or were particularly strong contributors.

            1. A.

              My first job out of school was Marketing Coordinator and I was so excited when I looked up job descriptions with that title, since the company itself didn’t provide one and called me in to interview for about 5 different roles. I thought I had ended up with a higher level job right off the bat.

              Yeeeeeeah, it was an administrative assistant role for the marketing team. It was great ultimately and very appropriate for my [lack of] experience, but at the time, it felt like a huge blow.

          1. Anon 2

            Easily. I had several positions that qualified under the administrative exemption when I was an assistant or a coordinator. It’s no different than many administrative assistants who quality under the administrative exemption.

          2. Ask a Manager Post author

            Titles mean all sorts of different things at different companies. Hell, “special assistant” can be a very senior role at some places and a junior one at others.

            But yes, it’s also quite possible that they don’t meet the duties test and the company is overlooking/ignoring that, which has been super common for years.

      1. Jessesgirl72

        That’s what I was thinking. If the rate was competitive for the job market, they weren’t underpaid. In some areas, $45K is a comfortable income, while in Silicon Valley, $48K still isn’t comfortable and the ones who make “too much to qualify” are still being underpaid!

        1. Outlier

          This is what I hate most about this law! Cost of living can be drastically different depending on where you live. I don’t understand why this isn’t a variable.

          1. Mike C.

            I don’t know that the agency in charge of this rule change even has the authority to tweak the law based on location. Even then it would require a significant amount of effort and monitoring to determine the correct methodology for testing this (there are many ways!), setting a current baseline standard and then updating it as it changes over time. When you have one number, it’s much easier.

            1. Natalie

              No, the FLSA as written applies to the entire country nationwide, although much like the minimum wage there’s nothing stopping states from passing additional protections.

              The new threshold was determined by looking at the lowest wage census region and I presume the future inflation-pegged increases will do the same.

      2. Bean

        OP here. I should have mentioned in my letter that neither of these employees ever work overtime. In fact, I doubt they put in 40 hours most weeks! There is another coordinator on our team who is NOT getting a pay raise, and she not only is a consistently high-performing employee, she also regularly works overtime. It just doesn’t make sense (hence my agitation).

        1. LisaD

          If your employer is giving raises to low performers and no raise to high performers, that’s an issue you need to think about in evaluating how long you will stay there.

          That being said, are you sure the coordinator didn’t request to be exempted from the raise? She may make more if she regularly works overtime than she would by getting a raise that removes her ability to earn overtime. A high performing hourly employee who works a lot of overtime can easily make more than a salaried employee who is exempt.

          1. Bean

            No, she is under the threshold and is definitely not happy that she is not being given the opportunity to become salaried.

            1. John B Public

              Are there other extenuating circumstances? And does she have a status that the other two don’t ( like she’s female and the other two mentioned are male)? Because then we might be talking about another issue…

    2. Vin Packer

      This.

      The problem is not with the law. Companies have multiple choices for complying with the law to ensure that their employees are all compensated fairly for their work; any anger at how the adjustments are being handle needs to be directed at the company. Don’t let them pretend the big, bad law is making them be unfair.

      1. Jeanne

        Yes. I have to disagree with what Alison said at the end. The company did not “have to” give them raises. They could have made them hourly. They could have told them that if their performance got better they could be put at the new salary level. They could have given managers raises or at least talked to them about the issue and acknowledged the problem. I wonder how the profits are. I don’t think OP wants to hear there is no money for manager raises and then info about great profits. To not even discuss this with their managers is ridiculous.

  3. Kate The Little Teapot

    I have a similar issue. As a manager I make the same as I did as an hourly employee, and I can’t get overtime, so I actually make less some weeks. The only perk is that I get paid lunches and 4 weeks of annual leave – that’s substantial but not giant. Honestly it was pretty disappointing that the promotion (which means TONS more responsibility) didn’t come with a pay raise.

    1. Kate The Little Teapot

      Oh, and I guess I should say I also have more stability and flexibility in that I’m guaranteed 40h a week and can work it on my own schedule. But still.

    2. Dan

      In general, many hourly people make more than their salaried mangers do, once overtime compensation is factored in. That’s not an unusual phenomena.

      1. copy run start

        True. I’m confident there are some long-term employees on my team who make quite a bit more than my manager. I know with OT they make more than double what I do starting out. Truthfully, even if management did pay more than what my highest-earning coworkers made, I wouldn’t do it because of the added stress and responsibility.

    3. Pari

      This happens in many tipped environments. I took a pay decrease to my first mgmt job solely to get mgmt experience. Although part of it was bc mgmt didn’t know how much we were making off tips.

  4. Elizabeth West

    Maybe they’re planning on making them work overtime.
    Maybe they’re just doing this in stages.

    I’ve never been so glad to be hourly. I would love to make that much money (the threshold is like a million dollars to me), but I can’t do 50-60 hour weeks. I would have no time to write. Or live.

    1. Rusty Shackelford

      Do you mean that’s the kind of workload salaried people have at your workplace, or are you assuming everyone on salary works 50-60 hour weeks?

      1. Elizabeth West

        What TheCupcakeCounter said–it depends on where you work, and also on what kind of work it is. But if you’re hourly, most companies do NOT want to pay overtime so they won’t make you work over 40 hours a week. With others, you almost have to and they’re fine with it. Most of the places I’ve worked don’t want to approve overtime for non-exempt folks so you don’t work it.

        Granted, if it’s more than 40 hours of work and they expect you to get it done in that amount of time with no OT, the job can really suck.

        The best part is that once I clock out, NO ONE CAN TALK TO ME ABOUT WORK. They would have to pay me. So I don’t have to answer emails or calls after hours from colleagues, my boss, etc., or take my computer home, or have a work phone, like an exempt employee might. My time off the clock is truly my time. :)

        Now if I ever get to the point where I’m writing full-time, that would change–if I don’t work, I don’t make money, so I’d probably have many irons in the fire and be working all the time. But I would know that going in.

        1. Rusty Shackelford

          With others, you almost have to and they’re fine with it.

          I don’t think that’s universally the case. Neither employer nor my husband’s (we’re both exempt) require or even encourage it. I’d love to see a survey of how many people on salary actually feel like they “have to” work overtime.

      2. Aunt Vixen

        She means she’d have to work 20 to 50 percent more hours than she does at her present hourly rate (at which she works 40 hours/week) to make the new threshold income.

    2. TheCupcakeCounter

      At OldJob I was working 50+ hours/week regularly and then even more certain weeks and I would have been under the threshold for the new law. Now I am well above it and have worked more than 40 hours less than 10 times in over 4 years. So it all depends on where you work

  5. madge

    OP, I wonder if because those employees have had “serious performance issues”, your company is planning to replace them and it makes sense to adjust the salary now rather than when they bring in new people (assuming the coordinator positions were underpaid before). I still completely understand where you’re coming from and I would feel the same way, but perhaps that will help you to see it as something other than them being awarded for being slackers. Where I’m at, there’s no way that a position would be approved for two salary adjustments in the same fiscal year.

    1. Torrance

      Or perhaps the company realises that ‘very new’ employees occasionally endure growing pains in new positions and are simply attempting to compensate them fairly in accordance with the new law.

      The OP’s issue should be with the company for not increasing their compensation or even for lowballing the negotiations last year, and the implicit contempt towards the new employees saddens me. Be ‘angry & demoralised’ at the company for being cheap, not at the employees whose only crime is no longer being paid so much less. (And, given that they are receiving substantial raises, one might assume that they weren’t being properly compensated in the first place. Being upset because your coworkers are no longer being taken advantage of could appear a bit… unseemly.)

      1. SkeltonCrew

        In my department, there are two levels of employment that are currently under the threshold. I am currently at the second tier. If my company decides to raise the first tier and the second tier both to the threshold, I will do a happy dance because a.) more money for me! and b.) more money for my coworkers who definitely deserve it. I won’t be mad if they’re making the same amount as me even though I’m one rung higher than them on the ladder.

      2. Bean

        OP here. I am not angry at my co-workers (about this particular issue) at all! I know it’s not their fault. The new law is creating a very tricky situation in my office. I do have hope that they will evaluate my salary, but in the meantime I am feeling pretty frustrated

        1. Roscoe

          It seems like there is some resentment though. Like if they were high performers, would you be as agitated as you are now?

          1. Bean

            Probably not! I’ve been annoyed at both of them for months for slacking, and have offered feedback to their manager, but nothing has been done. Like I said in another comment, this is the latest in a long string of frustrations (that are mostly the fault of my employer). I am not planning to take my frustrations out on them! Though I do reserve the right to continue to roll my eyes when they come in at 9 and leave at 4.

            1. Anonamoose

              And I warn you to (ahem) change your profile so it doesn’t include your photo while virtually peeing into the wind. ;)

              Good luck, buddy. Been there, and it’s usually easiest to just move on.

              1. Bean

                Haha, it’s actually a picture of actor Christopher Meloni. I didn’t realize the account I used to comment here is somehow tied to a Fantasy Football account I also have.

  6. Anon for this

    Pay compression is an issue. Assuming your junior coworkers do actually qualify to be exempt (often an issue), then I agree there may not be much your company can do if they are wanting to keep them exempt rather than make them nonexempt (which they can do). Being exempt is more than just about money. For many companies, if employees do qualify for exempt status, it is just easier to pay them exempt and avoid some of the treacherous issues that come with wage and hour liability for meal, rest breaks, overtime, inadvertent off the clock work, and more (I won’t go into my tyrade about unethical lawyers who shake down companies via wage and hour discovery without having any idea whether a company actually did anything wrong).

    1. Pari

      They deserve to be shaken down many times. There are far too many companies that improperly classify employees. Or take advantage of the old outdated salary requirements and pay people peanuts because they can while working them to the bone. Sadly it’s up to the govt to ensure bottom feeding employers dont take advantage of the lowest earning workers.

      1. Anonamoose

        Ya, sorry Anon and HR Empress, I gotta disagree too. There are many many industries which flagrantly violate very basic rest and meal break laws and try to state that it’s the industry’s fault (see: food and beverage, most face to face recreational customer service, etc). While I do hate that lawyers have to get involved, sometimes it takes bringing the big guns to root out corrupt management.

        1. Anon for this

          Well, we can go round and round on this, like the poor guy who went out of business because of a technical violation of a pay stub (address missing – one person shop, so everyone knew where they worked). And by the very definition of shake down, I have to disagree. It doesn’t mean going after bad companies. It means going after innocent companies that really cannot afford to spend gobs of money to fight a claim. Meaning: these attorneys have zero evidence to support any violations, but they know the company will likely settle just because it cannot afford $100,000 in legal fees. If you think every company deserves that just by virtue of being a business, then we’ll just have to disagree.

          1. lokilaufeysanon

            I don’t think that was either of their points at all. And while there are a lot of baseless lawsuits out there, there are just as many (if not more) that have merit.

  7. Jadelyn

    “Your company gave your poorly-performing coworkers raises because they were required to do so by the new law”

    To be fair, they weren’t required by the new law to give those people raises. They were required to choose between giving raises, or making them hourly. Speaking as someone who’s org chose to go the other way and make people hourly (including a few people who are within literally tens of dollars of the new annual threshold amount, and who will be over the threshold after the annual increases anyway), they absolutely weren’t required to do what they’re doing. They chose to handle it this way, and it’s a legit choice, but they need to be prepared for the consequences of that choice, which may include angry and demoralized employees who are suffering the joys of salary compression as a result.

      1. LBK

        The OP does say that these two people rarely worked overtime, so it’s interesting to me that the company would guarantee them such a big pay bump when it sounds like a safe bet that average paycheck would’ve stayed the same. Of course, I suppose this could be out of administrative convenience (considering the adding cost of suddenly multiplying the number of timecards you have to process) and/or the result of a company-wide decision that was made based on many other departments/roles that did work more overtime.

          1. LBK

            Right, that’s what I’m saying – if they rarely worked overtime, it seems odd to me to pay the difference to keep them exempt because odds are you wouldn’t have to pay them any more as non-exempt employees anyway.

            If you mean that in reference to the administrative burden piece, you do still need to have a timecarding system available for salaried non-exempt people in the event they work overtime (although again, sounds like that would be rare in this case).

        1. Jennifer M.

          Well, these two coordinators might not work a lot of overtime, but what about other coordinators at this company? It may be that the other (high performing) coordinators do work a lot of OT and that raising all coordinators to the new threshold made financial sense for the company.

          1. LBK

            Yeah, that’s what I was saying with the last piece of my comment:

            and/or the result of a company-wide decision that was made based on many other departments/roles that did work more overtime.

      2. Jadelyn

        Absolutely, which is why I mentioned it may be a legit choice – there’s probably factors that neither we nor the OP saw that led to this decision being made, as a few other people have mentioned so far (administrative burden, internal consistency, etc).

        I just feel like the company ought to take responsibility for all the results of that choice, including the effects of salary compression on employees like the OP. It’s totally natural, IMO, to be upset by this, so I feel like advising the OP to talk themselves down from being upset by presenting it as though the organization had no choice is giving the organization more of a pass on their responsibility than they necessarily deserve.

    1. SystemsLady

      In some roles, it can be a burden not only for the company for somebody to switch to hourly, but also for the employee.

      If that employee has a company cell phone, particularly with access to work e-mail, and would ever be expected to use it after hours, even for a five minute call or to check email on an ongoing issue, that’s now time the employee has to record. In fact, the company may consider the employee having after hours email access at all a legal risk and decide that their phones must be configured differently (not that it has to be a legal risk, but I’ve seen that).

      Sure, there are probably apps that could help, but that’s something that has to be purchased and configured properly.

      If they weren’t recording hours at all previously, that can also be a challenge. What if the exempt employees in question are mostly remote, and the current hourly employees are in the office daily and use a physical time card to access and leave the office? The company will need a new system, or will need to manually collect and record hours from the employees. If their job involves a lot of travel during which they can’t access the timecard system, that’s a new paperwork burden.

      I wouldn’t argue a raise will always be cheaper than addressing these issues, looking at cost alone and particularly on a large scale, but it can be a lot more convenient.

  8. LBK

    I suspect the OP’s problem is going to be pretty common with the law changing, but I have faith that the market will start to correct over the next year or so. If nothing else, people are going to start dropping out of senior roles if they can do half the work for the same pay, so companies are going to have to come up with some incentive for those who aren’t particularly self-motivated to take on those additional responsibilities (same reason I’m not worried about increasing minimum wage – a rising tide will lift all boats, although it will take time).

    1. PK

      The minimum wage thought came to mind for me as well. It may take some time but hopefully it ends up balancing out.

    2. sunny-dee

      Well, a rising tide means that profits are going up, not wages. When companies make more, they can afford to do more — like hire more people or give increased wages or bonuses to existing employees. However, if wages are mandated to increase, all that does is increase expense for an employer, but they’re not getting any extra money to offset those expenses. It’s like having insanely high utility bills or something. It’s why the way it’s been working out in places like Seattle and San Francisco is that small businesses are shutting down or cutting back on the number of employees. It reaches equilibrium, but in a way that benefits fewer people.

      The wage compression thing made me think of that guy who decided to give all of his employees a minimum salary of $70,000 regardless of seniority or contribution — the previously high-earning / senior people were PO’ed and quit and the people who had smaller salaries actually felt uncomfortable, like they weren’t earning what they were getting. And then the company went bankrupt.

      1. Aurion

        Yeah, this. I’m a bit skeptical of the rising tide raises all boats analogy, because the increased business expense doesn’t necessarily mean the company profits are rising equally to keep the overhead sustainable.

      2. IT Kat

        Just as a note – if you’re referring to Gravity Payments as the $70k minimum wage company, they didn’t go bankrupt and are still in business and had a higher profit since they announced that in 2015. And only two employees quit… and in return they got people coming from other high tech companies.

        I don’t disagree with the rising tide analogy – but at the same time, companies that make more “can do more” doesn’t seem to play out by hiring more people and/or raising salaries, if they’re working fine with what they have. I’m running into that now where I work – profits have increased hugely over the last year (yes, profits, not just revenue) but he refuses to hire even one more tech support person for the IT department “because you guys are doing great as you are, and got us here!” He ignores the 50-60 hour weeks and 24/7 on call for the overloaded and outdated main database app that we can’t rewrite or optimize because we’re too busy putting out fires.

      3. frobly

        If you’re talking about Dan Price/Gravity Payments in Seattle, you are not quite correct. A few people left, 20 new people were hired, his brother is suing him, profits and productivity went up, he got a book deal, the employees bought him a Tesla as a thank you (talk about gifts flowing upwards!), and they’re currently hiring. So not the disaster you described.

      4. LBK

        I meant that when people complain about minimum wage, I frequently see the argument being about dragging people down rather than boosting people up. There’s a meme that’s been going around on Facebook for a while now that says something about burger flippers making as much as EMTs, and it seems completely backwards to me – we shouldn’t be mad that someone working at McDonald’s expects a living wage, we should be mad that someone whose work we deem as important as an EMT is only making $15/hr. We should want to increase wages for both of those people.

        I think most companies can stomach the increase more than they claim, particularly if the wage compression starts all the way at the top – there’s a pretty big gap between the top and the bottom that can be filled in. Profits also tend to be driven by sales, and no one’s buying anything if their wages are barely keeping up with the cost of living.

        I don’t mean to derail into a whole discussion of economic policy, my point was more for the OP to not take this personally and realize that it’s going to happen to a lot of people with the new law, and that it will obviously not be sustainable in the long run for companies to pay their management and lower-level staff the same amount.

        1. Persephone Mulberry

          we shouldn’t be mad that someone working at McDonald’s expects a living wage, we should be mad that someone whose work we deem as important as an EMT is only making $15/hr. We should want to increase wages for both of those people.

          YES.

        2. Christi

          I think it’s important to note the difference in cost of living when this discussion comes up. Someone in Washington DC may need to make $15 an hour to be able to pay basic expenses. On the other hand, someone living in rural South Carolina may only need to make $10 an hour to have the same standard of living

          1. LBK

            If we could come up with a federally mandated sliding scale that was pegged to local COL then I’d be all for it, but as it stands now minimum wage is roughly half of the average COL in the US for a single person with no children. It’s not just people in expensive cities who aren’t making a living wage.

      5. Anon 2

        But, many companies don’t. They increase the shareholder’s profit. Or the company is paranoid and they want to hold onto the money for a rainy day. Or, the company opts to provide bonuses or huge salary increases to the C-suite staff.

        Profits increasing doesn’t always mean that more people are hired or salaries increase for workers. The last few years have proven that, as the great recession was over, productivity of employees kept going up, but wages stayed stagnant.

        1. LBK

          I agree, and that’s why I think it’s important to have measures like this that force them to increase salaries so whatever profits they’ve recovered since the economy collapsed aren’t being hoarded.

          1. sunny-dee

            … Would you want someone to take any savings you’ve had in the last 8 years so you don’t “hoard” it?

            And, yes, business can spend profits on any number of things, some for the employees and some not. They could also build a new building or do more advertising or expand a product line or pay off debt, none of which directly benefit their employees.

            What I’m saying, though, is the “rising tide” philosophy means that companies have more money to work with — as in, the pie is getting bigger. With forcing a wage increase, the pie doesn’t get any bigger, only the expenses do, which means that the companies have to find that money from somewhere — cutting employees or hours, cutting expansion plans, reducing advertising, something.

            1. LBK

              With forcing a wage increase, the pie doesn’t get any bigger, only the expenses do, which means that the companies have to find that money from somewhere — cutting employees or hours, cutting expansion plans, reducing advertising, something.

              Some of those things don’t sound that bad to me – cutting expansion plans? Reducing advertising? Are those inherently equal or of greater value than paying the people you already have working for you what they’re worth?

              And I think what you’re missing here is the timing. The economy has more or less recovered; the pie has been getting bigger for a few years now, but the companies have been getting to decide how to re-slice it. As you point out, a lot of that has not gone to increasing the sizes of the slices for the people at the bottom (who have arguably suffered the most from the pie being so small for so long). The pie’s already big enough to cut it another way. It’s time for someone else to grab the knife.

            2. Misc

              The thing about raising wages at the lower end of the payscale is all the money goes straight back out into the economy – most people can’t afford to ‘just save it’ and there are lots of studies on this. Which means it goes straight back out into companies again. So raising wages is actually a good thing for companies, as they get money *and* healthy, happy employees, but there’s a bit more risk to individual companies and it requires them to let go of some money in the first place.

              So anything that throttles this cycle (e.g. by lowering wages so the money stays with the company) is actually not so helpful.

    3. FiveWheels

      In my industry margins are currently low. When the UK living wage comes into play everyone’s expenses will go up a good bit, but the market won’t allow prices to go up. I’d be surprised if many BigBosses want to take cuts to cover it.

      It won’t affect me personally but I predict a lot of very happy low level workers, and a lot of skilled and dedicated mid level workers being resentful.

    4. designbot

      Do companies really worry that much about people who aren’t self-motivated though, or do they just say “good riddance” when they leave and try to find someone better to take their place?

      1. LBK

        What I meant is that if you’re going to offer someone two jobs with the same pay and one is a lot more stressful and difficult than the other, most people aren’t going to take that one except for people who are more motivated by doing challenging work (so maybe “self-motivated” is the wrong term, but it would require a certain type).

        I think that as you move up the chain, finding someone who’s willing to work for less than they’re work and that you would still actually want doing the job is going to be pretty hard. You can probably fill an entry level spot in a day if you’re offering $47k for it; I don’t think you’d be able to do the same for a director.

  9. ThursdaysGeek

    I’ve known people who’ve felt a similar issue when our minimum wage went up. They’d started at minimum wage, and after a long time managed to get 10 or 20 cents above it. Then minimum wage went up, and everyone who just started was being paid the same as them: minimum wage. I don’t think there is a solution, other than remembering that life isn’t fair.

      1. sunny-dee

        But that’s not a given. Yeah, there are some crappy employers out there who exploit employees, but by and large, macro-level, businesses generally pay what they can afford. Food service (as an example) has a really low margin — they may increase wages when mandated but also cut back on hours or reduce the number of employees to make it up, because the money has to come from somewhere.

        1. Student

          They don’t generally pay what they can afford. There’s substantial evidence of this: rising profits at many companies, with no increase to general worker salaries, rising corporate cash-hoarding with no plans on what to use it for, rising productivity with stagnant wage growth. Rising wages at the very top end, with elaborate benefits for under-performing CEOs but no improvements for the general workforce.

        2. Mike C.

          Cutting hours/reducing employees doesn’t make sense because fewer hours worked means a reduction in production. This means that previously employers were making products that weren’t selling or that now there will be customers that would have bought products but now won’t. Any drive for automation or other efficiency improvements happen regardless of the state of the minimum wage.

          And you ignore the fact that when minimum wages go up, so does the spending of those employees. You must take this into account – demand goes up because those at the bottom spend the largest percentage of their take home income.

      1. Jeanne

        It is not petty to acknowledge disparities in treatment. You’re lucky if you never had a job where you worked you a** off and the slacker got the raise for some odd reason. If you sabotage your work that might be petty. But it’s not petty to feel hurt and unappreciated. It’s reality.

      2. Isabel C.

        This. If your salary doesn’t cover what you want and you think you’re justified in asking for a raise, go to. But maybe don’t pay so much attention to what other people are earning? Eyes on your own paper and all that.

  10. not so super-visor

    I feel your pain, OP — 100%!! I make just barely over the threshold and supervise 25+ people. Now people who have way less responsibility (including a few that I supervise) will be making the same. The company has pretty much shrugged it off as a non-issue.

    1. Jeanne

      This to me is the real problem. You know the law is causing changes. But to say it’s a non-issue is the bad part. Why can’t they even give lip service and say that they know it’s a tough time? Why do employers refuse to treat us like humans?

  11. insert pun here

    I once had a similar issue, not due to the wage law (that’s probably a once-in-a-working-life change) but rather due to some bureaucratic nonsense that resulted in entry level employees getting more regular and larger raises than non entry level staff. Anyways, I don’t disagree with what Alison says here, but I will add that how your company reacts to this (and how individual people within your company react to it) will definitely color your feelings about your job from here on out. Just something to be aware of.

  12. Zzz

    My company still has not said anything about the changes… I make 40k and am salaried exempt. It’s a large company (almost 2000 employees) with a large HR department. I know they probably won’t increase my salary because there are hundreds of us that make less than the new threshold, but I just wish they would tell us anything at all! My manager doesn’t know anything, either. Ugh.

    1. Hotel GM Guy

      My company had my Assistant GM (and all the ones in the company) track her hours for about 2 months this summer and were going to make a decision based on that data, but it’s early November now and we haven’t heard anything about it, and neither has our regional director. We figured that it would only take an average of 45 hours a week to equate to just giving her the salary raise to 48k, and she worked about an average of 53 hours while they were tracking it. I think they’ll give out raises, but the lack of communication this late in the game is irritating for us, especially because we’re making budgets for next year.

  13. voyager1

    I think a lot of folks get bumped vs going hourly are probably find themselves not getting a raise for a while. Companies many times have a range for a job when it comes to pay, once you top out you are done getting raises. Seen this a lot in my current field of banking.

    1. Natalie

      That may not be possible – as part of the threshold adjustment, the Department of Labor will also now be indexing it to inflation and adjusting every 3 years. So they’re not going to have another 40 year lag.

  14. LawCat

    “Meanwhile, try to talk yourself down from being angry and demoralized. Your company gave your poorly-performing coworkers raises because they were required to do so by the new law; it’s not a reflection on you.”

    OP, I was angry and demoralized over pay issues with my last employer. I went through a whole roller coaster of feelings so I get it. I ultimately channeled that energy into looking for a new job. If you do not like their response when you raise the issue, you might focus your energy into a job search.

    It is really frustrating to be effectively told that your contributions as a high performer are not valued in a way that is reflected in your pay. But it really isn’t about you, it’s about the employer. It’s about how the company chooses to prioritize these things. Since your review is coming up, it’s a great time to catalog your accomplishments and goals so you can prepared not only for your review, but also be prepared to get the job search going if the review has news on compensation that is unacceptable to you.

    1. Bean

      That’s a really good point. This year has been incredibly tumultuous in my department – we have a new VP and I have a new director because the previous director got fired in September (for good reasons). I keep telling myself I am going to stick it out until the end of the year, and see how I feel then. This salary issue is just the icing on top of a very terrible cake.

      1. Natalie

        Well, why wait until the end of the year to start looking? For one thing, the end of the year isn’t that far away and hiring does generally take at least a month or two at the shortest. And you can always turn down a job if it’s not the right fit or something has improved at your job to make you want to stay.

      2. Jerry Vandesic

        Start looking now. It doesn’t sound like they are treating you in a way you want to be treated, so look around. If you find something better that pays a salary you are looking for jump, otherwise keep looking until things improve at your current employer or you find something else. Worst that can happen is that you don’t find something for a while.

    2. I Like Pie

      This, so much! When I started at my place 5 years ago, I had a furlough day every other week; a year later I had to take on more teapots when they let go of my part time counter part. Then a couple of months after that had a “temporary” 10% pay cut that lasted until this year, when I finally had to say, thanks in large part to this site, “Hey, I’m doing XYZ more than I started with, my clients love me, you continue to rely on me. The average for my position in this area is this, how close can we get to it?” When the response was, “we got someone else to hire you to work on your furlough days” I almost walked. I took a day off to process and make a plan of what was acceptable and what I would do if they didn’t meet it. Fortunately we came to an agreement, but now I’m waiting to see how the new threshold will affect me. And I’ve since began training in a new field with more earning potential that I’m interested in, so that I can get out sooner rather than late.

      It was very eye-opening to get that reaction of “I got you another job” rather than figuring out a way to show I was of value for what I’ve already done.

  15. mousie housie

    It is disappointing that so many are making light of pay compression in the comments.

    I work in a market with a high minimum wage (and rapidly increasing at that) and it absolutely does affect how we manage staff and reward stellar performers. Unfortunately, we are not recouping enough money to scale salaries for jobs that were once a dollar or two above minimum wage. I’ve been hit by that myself and it is demoralizing.

    Our “minimum wage” jobs are low-skill, designed for entry-level workers (usually summer students) and raising the cost of those just means we end up cutting labour hours and looking to outsource/automate roles that once were great opportunities for someone to enter the workforce. Meanwhile, pay rates in the middle stagnate, and roles at the top are rewarded by how much labour cost they end up saving for organizations. Raising the sand level isn’t a rising tide lifting all boats.

    1. LBK

      If this is aimed at me, I certainly don’t think I was “making light” of pay compression in my comment. But I think that forcing the change at a national scale will fix some of the negative impact you see from localized changes – for one thing, it will flood the economy with buying power that hasn’t existed for years. For another, it will require some form of parity across geographic regions, so that larger corporations can’t play games with where they carry out their operations.

      I don’t doubt that there’s big downsides to smaller companies who are already operating on small margins, but we need to do something to rev up the people earning money -> people spending money -> companies making profit cycle. It’s absolutely going to suck for a lot of people in the short term but I sincerely believe it’s going to be better for everyone in the long run, because the answer can’t be to just stick with the extremely slow growth we have now. We’ll never catch up that way.

  16. Geekster

    So here’s a rhetorical question…

    We voted for the people that passed this law. If we don’t like the consequences of this law, what are we doing about it?

    It’s not the company’s fault that by our proxy we passed this law and forced the company to alter their course of business.

    1. Natalie

      The law in question isn’t new, it’s just the same old Fair Labor Standards Act that’s been in place since the 30s. The Department of Labor used their rulemaking authority to increase the salary threshold at which that act no longer applies.

    2. Maya Elena

      Was it a law in fact, or an administrative rule, passed by all those democratically elected officials over at the Dept. Of Labor?

      If you look across the US legal landscape, an ever-increasing volume of potent and costly regulations are in fact rules written by administrative entities (that then act as judge, jury, and executioner of any supposed violation), not actual elected legislatures.

      But that’s off-topic a bit.

      1. Trout 'Waver

        It was intended to be scaled yearly for inflation, but that never happened. The recent administrative action just restores the cutoff to its original level, corrected for inflation.

        1. LBK

          And established that it does have to be adjusted for inflation every 3 years going forward so that we don’t have to do this again in 40 years.

          As a side note, if doing things by administrative decree is how we have to drag the country forward on things like income inequality, I’m all for it. Congress seems no more able to agree on any substantial issue than a YouTube comments section, so somebody’s got to get some work done.

      2. Mike C.

        I really don’t see the problem with this – you give actual experts the means to make the nitty-gritty rules. I wouldn’t want to directly elect the folks who decide how to build a space shuttle or determine the best standards for keeping atomic clocks.

    3. LBK

      Correct me if I’m wrong, but I believe the DOL oversees and alters the terms of the FLSA directly without Congressional approval. The only elected official involved is Obama, and I think we’ve done just about all we can to get him out of office (ie elect him twice so he can’t come back).

      1. sstabeler

        not…exactly. The DOL can’t alter the law itself. The law probably says that the government can determine criteria for exemption. However, if (for example) Congress modified the FLSA to specifically say anyone earning at least $0.01 is exempt, there’s nothing the DOL can do to change that. same for if Congresss modified the FLSA to require a vote of Congress to change the requirements.

        1. LBK

          Yeah, I phrased that badly – the FLSA gives them authority to adjust certain terms of the law like the rules for exemption, but they can’t unilaterally change the entirety of the law or override Congress if Congress passes changes to the law.

    4. fposte

      A different question might be why haven’t we raised the issue of the outdated threshold to our legislators during all those years it was falling behind?

  17. Pari

    The term for this is wage or salary compression- when salaries that should have some separation are essentially squashed together. This is absolutely a compelling argument because if other companies are doing the same someone is going to realize that you can take less responsibility for the same pay. So it will become harder to recruit. Some employers will figure this out quicker and will offer more.

    1. Ann O.

      Are there that many people looking to decrease responsibility? I’m going a little anecdotal here, but increased responsibility often comes with intangible benefits (more respect, more power/higher impact). It seems to me that a lot of people are as interested in the intangible as the higher pay. They may mind people with less responsibility getting as much pay as them, but that doesn’t translate to wanting to lose the intangibles.

      Like look at this letter. Why does the OP care about whether the coordinators make as much money? The OP isn’t losing anything. It’s indignation that people are getting something the OP doesn’t think they deserve. A problem, sure. But it doesn’t sound like OP wants the solution to be switching to a coordinator role but rather getting more money.

      1. Pari

        Flip that around. How many people are willing to take on more responsibility for no increase? Yes you will find some but people don’t stay when they don’t feel they’re being treated fairly.

        But to answer your question it really depends. Although I know quite a lot of people that would rather not deal with managing people for example and would happily take the same pay and have that responsibility taken away

        1. Pari

          In other words you raise it as an issue of fairness and if they don’t budge you find leave for a company that has figured out you can’t expect people to stick around when this happens.

      2. Jeanne

        Why does OP care? When you are a manager with extra responsibilities, extra hours, all the stuff that goes with it, you should make more than someone with much less responsibility, less hours, less committment. It may not have to be heaps more but it should be more. It’s the way the company shows that they value all your extra work. The OP’s company, by not even addressing the issue, is clearly sending a message that her extra effort is not appreciated.

      3. LBK

        I’m going a little anecdotal here, but increased responsibility often comes with intangible benefits (more respect, more power/higher impact).

        But most of those things are done in service of building up your resume and clout so you can keep moving on and up. They aren’t necessarily rewarding on their own merit. As the tangible incentives for moving up decrease, the intangibles start being worth less. Their value comes from the perceived future return on investing your time and energy in them.

        And I don’t think people are going to start stepping down from senior roles en masse, but if you were already looking for a job for other reasons, I think you might consider lateral moves or even demotions that you wouldn’t have considered before if the pay’s going to be the same.

        1. CMT

          Nope. To some people those things are rewarding on their own merit. Certainly not everybody and that’s fine of course. And more responsibility should be rewarded with more compensation. But I know if I had the choice between two jobs with roughly equal compensation but different levels of responsibility, I would want the one with more responsibility because of my own preferences about how I’d like to spend my time working.

          1. doreen

            That’s going to depend a lot one the specific jobs , though. If a Teapot Assistant 2 does more interesting work than a Teapot Assistant 1, then people might take the more interesting job for the same pay. But IME it’s different when one job is an individual contributor role and the other is supervisory, or even when one job is supervisory and the other is management. It happened at my job from about 2008 on- the union supervisors got contractual raises and the non-union managers didn’t, which caused salary compression. It became very difficult to fill the management jobs, because nobody wanted to go from being responsible for 6 people to being responsible for as many as 50 without a raise.

          2. LBK

            I mean, I personally would probably take the one with more responsibility too, but probably only once – I’d go up one level in the hierarchy without a pay increase if it sounded like interesting work that I wanted to do, but I don’t think I’d go up two without at least some increase in compensation, and I think the amount of people who would is a tiny, tiny percentage.

  18. jaxon

    Somewhat off topic, but on the theme of making the same $ as very junior colleagues.

    I got a promotion less than a year ago, with a great title (Senior Teapot Manager) and salary. When I started the job, I was told that the title would change to “Teapot Manager” – the “senior” thing is “no longer really being used.” Okay, sure. And my salary is $10K less than I was originally told, but it’s still so much more than I had been making that it’s fine, I can get over it.

    More recently, somebody else was promoted. This person has far, far less experience than me – she came here from an entry level job at a much smaller organization. She had only started here a couple months prior to being promoted. She was promoted mainly because we needed someone badly in the role she was promoted into.

    Her title is “Senior Teapot Manager,” and I have reason to believe that she is making MORE than the salary I was first promised. She is smart and professional and a fine team member but she most definitely isn’t doing work on the same level as me.

    This is so bizarre and irrational that I’m not sure what to think. We are not the kind of org that promotes underqualified people, or pays people at rates that don’t make sense. But I am at a loss. This fact, unto itself, has caused me to begin searching for a new job.

  19. Joe X

    ” Your company gave your poorly-performing coworkers raises because they were required to do so by the new law; it’s not a reflection on you.”

    This is completely false. The company is choosing to give them raises, they are not required to. The law requires the company to pay them OT if the keep the same salary. The company made the decision to give them raises to keep them exempt.

  20. George Dorn

    “Plus, if the request would take you above market rate for the work you do, they’re not likely to do it — so that may mean waiting until there’s been time for the impact of the new overtime law to shake out in the market.”

    People agitating for raises in this exact situation is how the law shakes out in the market.

  21. boop the first

    Why does every discussion about raising minimum wage/thresholds/whatever always boil down to “I don’t want to feel on par with Those People.”

    Maybe they work as hard as you do. Maybe they deserve to eat and pay rent and not be homeless. It’s kind of a stretch in this case, but it angers me that SO MANY PEOPLE are barely surviving just to save more privileged folk from having Feelings.

    1. Rusty Shackelford

      That’s kind of backwards. It’s not about wanting to make more than Those People because Those People don’t work hard or don’t deserve decent pay. It’s about feeling that you work longer, or at a more difficult job, or at a job that requires more experience and more education, and should be fairly compensated. No one wants others to be held down, but it can be demoralizing when your job demands more of you and doesn’t offer more in return.

    2. Bananarchy

      I agree, I think a lot of minimum wage/base pay discussions get dragged into depressing bickering over who deserves more and who deserves less. If this company cares about retaining its good employees, they’re realize it would be wise to bump OP’s salary for morale reasons. But as an individual employee, it’s never wise to act like you’re competing with your coworkers in a zero sum game which you lose if others win.

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