the federal government is taking up overtime pay again

by Alison Green on August 7, 2017

The U.S. Department of Labor appears to be moving forward on an overtime rule that caught up millions of employees and their employers in some serious workplace drama last year.

To recap: Last year, under the Obama Administration, a new rule was expected to take effect that would have required an additional 4 million American workers to be paid overtime if they worked more than 40 hours in a week.

To understand the change, you need to know that the federal government divides all workers into two categories: exempt workers, who are not required to receive overtime pay, and nonexempt workers, who must receive overtime pay. The exempt category covers employees who perform relatively high-level executive or professional work, outside sales employees, and a few other narrowly defined categories. Currently, you need to earn at least $23,660 a year to be considered exempt, but the new rule would have raised that to $47,476 – making millions of workers non-exempt and thus eligible for overtime pay.

The current salary threshold was last set in 2004, and it hasn’t increased with inflation. That’s led to an increasing number of workers with relatively low salaries who are working long hours for no extra pay. And although the overtime exemption was intended for relatively highly paid, skilled professionals, in practice employers have really stretched that definition – and so you see things like, say, a retail manager working 60 hours a week while earning $30,000 because she’s considered “exempt.”

The new rule with its accompanying new salary level was scheduled to go into effect on December 1, 2016 but it was blocked just one day before by a Texas judge, who issued a temporary injunction halting it nationwide. By that time, many employers had already reclassified workers as non-exempt, or even raised some people’s salaries to bring them up to the expected new threshold. Other employers had changes scheduled to go into effect, but halted them at the last minute when the injunction was issued. That’s left a lot of people in limbo, unsure of how this would ultimately play out.

Since then, the new presidential administration has said that it won’t defend the new overtime rule in court.

Additionally, the Department of Labor has announced that it’s working on a new overtime rule – not the current one, and not the one that was set to take effect last year. It’s also waiting for the Fifth Circuit Court of Appeals to confirm that it has the right to set that threshold at all.

On July 26, the Department of Labor published a Request for Information, seeking input from the public on questions related to the overtime rule, including:

  • Should the 2004 salary test be updated based on inflation? If so, which measure of inflation?
  • Would duties test changes be necessary if the increase was based on inflation?
  • Should there be multiple salary levels in the regulations? Would differences in salary level based on employer size or locality be useful and/or viable?
  • Should the Department return to its pre-2004 standard of having different salary levels based on whether the exemption asserted was the executive/administrative vs. the professional?
  • Is the appropriate salary level based on the pre-2004 short test, the pre-2004 long test, or something different? Regardless of answer, would changes to the duties test be necessary to properly “line up” the exemption with the salary level?
  • Was the salary level set in 2016 so high as to effectively supplant the duties test? At what level does that happen?
  • What was the impact of the 2016 rule? Did employers make changes in anticipation of the rule? Were there salary increases, hourly rate changes, reductions in schedule, changes in policy?  Did the injunction change that? Did employers revert back when the injunction was issued?
  • Would a duties-only test be preferable to the current model?
  • Were there specific industries/positions impacted? Which ones?
  • What about the 2016 provision that would permit up to 10% of the salary level to be satisfied with bonuses? Should the Department keep that? Is 10% the right amount?
  • Should the highly compensated employee exemption salary level be indexed/how? Should it differ based on locality/employer size?
  • Should the salary levels be automatically updated? If so, how?

If you want to submit comments on any of these questions, you’ll find instructions here. The deadline to submit input is September 25.

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{ 117 comments }

{ 117 comments… read them below }

  1. Princess Consuela Banana Hammock*

    It is probably wrong for me to feel this way, but I have no faith that the DOL is actually going to revise the OT rule.

    1. neverjaunty*

      That’s just being realistic.

      Alternatively, they may try to re-write the rules so that they pre-empt state laws that are more worker-friendly than certain states’ laws.

      2. Princess Consuela Banana Hammock*

        This is actually what keeps me up at night—all the ways the feds can try to preempt state laws. On the plus side, the FLSA doesn’t seem to offer that kind of preemption for more-worker-protective state laws, so I would be surprised if they can achieve it through regulation. (They can certainly try, but that’s a massive lawsuit that I’m sure Washington, California, etc., are willing to take on.)

        1. Snark*

          Funny how states’ rights matter when it comes to some issues, and get kicked to the curb when it comes to others.

          1. Junior Dev*

            To paraphrase Senator Ron Wyden, “states’ rights only matter when they think the state is right.”

            (I’m avoiding more details lest I fall afoul of the “no politics” rule, but you can look up the context for this if you want to learn more.)

        2. TootsNYC*

          On the podcast BackStory several weeks ago, one of the hosts (a history professor) said, “States’ rights are for losers.” The idea being: you rely on states’ rights when you can’t get what you want from the federal laws (i.e., you’re losing federally).

          It was an interesting thing to think about.

        3. De Minimis*

          I’ve seen this happen on the state/local level as well. My former state made it illegal for municipalities to raise the minimum wage. So much for small government….

    2. The IT Manager*

      The law’s purpose is to protect the worker, but the US has a very business friendly systems and the business lobby has a lot more power than the employee lobby. And what is good for the bottom line (paying employees the bare minimum and don’t bother with a living wage) is not good for the employees. In other words, I agree with you.

    3. Luke*

      I’m of the opinion we are better of leaving this rule alone.
      While there is a valid argument for modifying the FLSA , it should be noted that any metric we tie the salary number too becomes a worker exploitation risk. Way things are now, some companies definitely abuse the salary classification to decrease overtime pay; which isn’t ideal.

      Why do firms do this? Because they see staff as a number on an expense spreadsheet, period. It is a backwards management philosophy but that doesn’t make it any less common. A company who misclassfies their staff will think nothing of packing up shop and moving staff to a lower COL state to game the new salary system. Or if the qualification is based on the location where work is performed, companies start creating Work at Home posts and hiring remote workers in low COL areas over local hiring in a high COL area.

      It is unfortunate,but any proposed labor law must be viewed from the perspective of a lowest common deminimator business manager to ensure we aren’t accidentally incentivizing worker exploitation.

  2. The IT Manager*

    I know you’re busy this week Alison, but I would like to see how you would answer to those question out for public comment.

    I think it’s obvious that something has to change from the current law, but how far?

    1. Ask a Manager* Post author

      My work this week is limited to snippets here and there (I am currently surrounded by five packers and a bunch of boxes, which is not conducive to real thought) so I am going to pass on that this week!

  3. Alison Read*

    Canceling implementation in the 11th hour was just insane, but perhaps it was for the best? The main thing I’ve never understood – why don’t they tie the min wage, as well as the salary threshold, to the federal COLA standards? That seems like a logical answer rather than putting NYC, Biloxi & Seattle on the same plane.

    1. paul*

      yeah. When housing cost in particular vary as widely as they do, it’s hard to have a reasonable minimum wage that’s the same nationwide.

    3. Annie Moose*

      I imagine it’s easier to have a flat rate. Not just for employers, but also for employees–if there’s a single flat rate out there for everybody, it’s pretty easy for you to go, hang on, I’m making less than this, I’m owed my overtime.

    4. Kyrielle*

      It’s got to be pretty tricky to figure out how to have it change over distances where someone working in one place may live in another with a lower COLA…but still worth doing. Oregon is trying it, so it might make sense to see how that pans out before enacting it further. (Or it might just waste time to wait!)

      1. Kyrielle*

        Er, Oregon is tying the minimum wage to location. Not the threshold for exempt/non-exempt.

      2. Princess Consuela Banana Hammock*

        That’s true, but then they could tie it to the changes in the federal pay schedules, which are usually issued annually.

        1. Princess Consuela Banana Hammock*

          I just realized that’s exactly what Alison Read wrote. D’oh!

          The federal tables tie salary to MSA, which can have pros and cons. I lived outside of one MSA and worked in a higher-paying one, which was an awesome windfall for me. But the difference between the two was not that big, all things considered. I suspect I would have felt differently if I lived in the higher-paying, higher-COL MSA, though.

        2. De Minimis*

          The federal pay schedules are tied more to what other employers in the area pay, and aren’t necessarily tied to cost of living. You can have a higher cost of living area that still pays relatively low salaries, and the federal pay schedule will reflect that. Places like Austin and Portland are good examples.

    5. Manders*

      I totally agree with this, but I guess the fear is that it would make things chaotic for businesses in areas where the cost of living changes rapidly. I live in a place where the cost of housing is going up about 10% a year and rents on spaces zoned for business are also shooting up. I can see how that could make things difficult for a small business trying to figure out what its labor costs might be in 5 years.

      (For the record, I’m still 100% for higher minimum wages and salary thresholds. When the minimum wage was raised in my area, local businesses got a huge boost because people who had previously not been able to spend money on anything but necessities suddenly had extra room in their budgets for entertainment, nicer food, non-thrift store clothing, etc.)

    6. Princess Consuela Banana Hammock*

      The old school answer is inflation—that chasing COL changes just contributes to inflationary behavior (the research on this is divided, but it generally seems to be an economic truism that isn’t borne out except at the margin). Of course, given how low real wages are right now, I don’t find lop-sided inflation to be a compelling reason not to pay people their worth.

      With respect to why pursue job classifications, I think it’s in part because raising the minimum wage (and tying it to COLA) is a bigger lift.

      1. nonymous*

        Back when I worked retail our state had a minimum wage hike (I think it was about $0.75 ?). So all the staff that was being paid min wage got the increase – great! But all the staff that had earned the $0.75 premium above minimum wage previously through hard work? Now were classified minimum wage workers.

        I think the issue is larger than raising minimum wages – it’s a complex problem to raise pay in a way that doesn’t erode the earning power of those with tangible skills and experience, while still supporting the “race to the bottom” pricing that consumers demand.

  4. Elmyra Duff*

    Everyone should be eligible for overtime. Don’t want to pay it? Don’t make your people work more than 40 hours.

    2. Kiki*

      I can see executive level jobs be exempt from overtime, as people in those roles need to work long hours as part of their job. However, their salaries and other job perks compensate them for the long and sometimes weird hours they work. But I agree that entry-level admins and such shouldn’t be working long hours for salaries only slightly above minimum wage.

      1. Ask a Manager* Post author

        And to be clear, under the current law, entry-level admins shouldn’t be working without overtime. The problem is that the law has become widely ignored.

        1. Princess Consuela Banana Hammock*

          Alison, do you think the issue is an enforcement problem, or a classification problem?

          It seems like many companies were able to justify the non-exempt classification based on the job duties test (e.g., shift manager at WalMart). So the only backstop became the salary test, which is how so many low-paying jobs made it through the loophole. But if entry-level admins are working without overtime, that sounds like an enforcement problem. Or was it both?

          1. Princess Consuela Banana Hammock*

            Ugh, sorry, I meant the “exempt” classification (need more coffee).

            1. LabTech*

              I remember being frustrated when you posted a comment in the “It’s Probably Legal” thread outlining what’s actually illegal (wage theft, discrimination), thinking how ubiquitous those practices are. I’ve seen a handful of comments in the most recent open thread from people asking about how to navigate serious sexual harassment and stalking behaviors, I’ve seen first-hand the pressure in academia for lab technicians to work off the clock (not to mention the casual racist and sexist remarks that go unchallenged in a male-dominated field), and the hiring biases around people with ethnic names is well established yet there haven’t been any systematic changes to hiring or employment law as a result of systemic and widespread discrimination.

              I’m just really frustrated with the state of employee-employer relations in this country, and how the current administration (at least says) they’re very skewed to the employer side. I guess this except/non-except development is a sliver of hope. But it doesn’t address the overarching issue: it simply should not be this hard in a highly developed nation to find a job, and to use that job to pay for essentials like housing and healthcare if working full time.

              1. neverjaunty*

                The problem is that people are punished for enforcing their rights, and the necessity of having to turn to lawsuits to enforce those rights gets handwaved as “frivolous lawsuits”.

                1. Princess Consuela Banana Hammock*

                  Yes, this. I think we’ve often seen in the comments that people also really worry about being blacklisted if they sue to enforce their rights.

                  And in my experience, people who are further down the socioeconomic ladder have less access to legal counsel or support. Even with plaintiff-side attorneys taking cases on contingencies, even with functional state EEOC-style agencies, and even with Legal Aid organizations filing wage-and-hour complaints, even with PAGA provisions, there’s a huge swath of people who simply don’t have the financial security or access to enforce their rights. This seems especially true for folks who are just starting their careers, live paycheck-to-paycheck, or are the primary income-earner.

                1. LabTech*

                  As AAM and neverjaunty mentioned, there would need to be more stringent enforcement measures in addition to laws, but a good start would be up-to-date, more realistic minimum wages (likely tied to municipal COL, as alluded to in the DoL questions above, because a $15/hr looks very different in the rural Midwest versus the Bay Area, for instance), and either programs incentivizing overtime or laws disincentivizing employers from exploiting entry level and retail employees by classifying them as exempt to get around paying overtime.

                  As far as the race biases in hiring go, measures to ensure the application pool is diverse, and (just off the top of my head) only displaying expunged resumes/application materials to HR and the hiring managers, if those indeed lead to a more diverse workforce. Incentivizing employers to reach out to communities of color for both educational and career opportunities (e.g. scholarships, after school programs, and of course jobs) and programs encouraging women to pursue (and providing support to women in) male-dominated fields. Of course, to truly get a diverse workforce, you’d need a representative applicant pool, which – with respect to race, at least – can only happen by fighting the structural, de facto segregation seen in our education system and housing in major cities. Unfortunately, that’s not the sort of thing you’re going to find the answer for, from a lab technician commenting on a workplace informational blog.

              3. paul*

                I’d trade the overtime rule for significantly more vigorous enforcement of existing labor laws myself.

                1. Not So NewReader*

                  Amen. We still have companies telling employees that they are a blend of exempt and non-exempt, this means they have an hourly rate. But they are only paid for 40 hours and they work upwards of 90.

                  The people I really feel for are the ones in government who get more and more regs and related paperwork piled on them but do not get hours added to their week/check. I know of people who have easily 50 hours of work, in order to be in compliance with all the regs and yet they are paid for a 10-15 hour work week. Some full time people (30 plus hours) easily have 60-70 hours worth of work. It’s nothing to see stacks and stacks of paper (2 feet, maybe higher) all around them. The stacks never go away. Ever.

              4. blackcat*

                What I see super often is in food service:
                1) Waiters not being paid the minimum wage if their wage + tips comes in below minimum wage
                2) Waiters being forced to pay for dine and ditch customers

                1) only tends to be a problem for lower-end places, but, anecdotally, I’ve heard of 2) happening everywhere. My cousin once had to fork over $200 for a family that dined and ditched at a pretty nice restaurant.

                2. Cercis*

                  When I commented about the law requiring restaurants to make up the pay to minimum wage, I was told that only bad waitresses needed that and they didn’t keep bad waitresses around (basically – we’ll fire you for not doing your job) even though I was working shifts that were dead and wasn’t coming close to selling enough food to make up the difference. They were SHOCKED when I quit. I should have turned them in at that point.

      2. Antilles*

        I get your point, but that’s just an excuse. You know what would happen in Elmyra’s “everybody gets OT” rule passed? Companies would just modify their executive salary scales accordingly! Instead of paying your branch manager $1,000,000 a year, you’d instead give him a base salary of $800,000 with the extra 15-20 hours per week of OT adding back into the total. Or maybe they’d reduce the salary by a little less to $900,000, but institute a firmer cap on his hours so that he rarely goes above 45 hrs/week. Or heck, maybe they keep salary the exact same, but delegate more duties to the assistant manager to avoid paying the OT.
        There’s many ways to make it work. Using “well executives sometimes need to work long hours” is just an excuse (albeit one that companies absolutely *would* use if this idea ever seriously entered the conversation).

        1. Not So NewReader*

          I am not sure this is totally bad.
          I know of one company where employees can get sucked into 24 to 36 hour work days. No, it’s not a medical business at all.
          But speaking of that my friend is taking a job for a local medical place. She will work 3- 12 hour days then have four days off. A medical place that has never heard of brain fade, obviously. I don’t think I will go there.

          I think having some caps might be good. But everyone will have to rethink their expectations in order to do this. We might have to get away from our continuous consumption habits.

          1. Julianne*

            Friends of mine who work in medicine (doctors/nurses) tell me that it is considered preferable for those providers to work longer shifts in order to decrease instances where care of patients is handed over to others, i.e., the idea is that (apparently?) it’s better for the patient to have his medical team caring for him for 12, 18, 24 hours straight rather than handing him off to a different team every 8 hours.

            Having never worked in medicine or (fortunately) been hospitalized for a prolonged period of time, I can’t speak to exactly how these decisions are made and evaluated or how they actually play out for patients and medical providers.

      3. Sharon*

        Not entirely. I work in the IT industry and know many highly paid professionals who’s earnings are barely over minimum wage if you divide their annual earnings by the hours they worked that year. There are employers out there who grossly abuse their professional staff. Especially these days of cell phones and being reachable 24×7.

        I was thinking that in addition to a salary criteria they should add an hours-worked criteria. For example, if you regularly are asked/required to work 70 hours or more a week, you need to moved to non-exempt. I don’t see that happening, though.

        1. Mike C.*

          One of the big places where this sort of abuse happens is with managers of fast food places. They basically have the same duties as a normal employee, but because they also manage, they’re exempt and work insane hours. And no, they aren’t paid well for that time either.

          1. krysb*

            When I worked in fast food, the assistant manager had to work 53 hours a week – that was required to be on salary. Not worth it.

    3. High Score!*

      AGREED! THIS EXACTLY x 1000000!
      If people are working more than 40 hours on a regular basis (I understand a rare emergency), there is a management problem.

      1. Iris Eyes*

        Agreed if anyone is normally working 60 hours then clearly your business has a staffing or IT problem.

        Maybe instituting an overtime for everyone but people in the exempt category are doing overtime if they work 50+ hours? Or maybe instituting a French like vacation policy. (Minimum of 3-4 weeks and it is illegal for you to be contacted unless a state of emergency is declared or someone dies etc.)

        I think a lot of exempt employees do get to take advantage of more seasonable flex time, but there is definitely a lot of abuse in the system.

        1. High Score!*

          Ironically studies show people are most productive working 32 hour weeks and anything over 40 is unproductive anyway. Flextime for exempt employees means that you still have to put in your 40 hours so if you take off in the middle of day for appt, you have to make the time up. But if you’re required to work extra 10 hours, the company didn’t have to pay or give it back.

    4. Manders*

      I recall that there are some countries where you do have the option of making your employees work more than 40 hours, but it comes with a significant tax penalty and a cap on how many hours over 40 you can ask for. Basically, it’s not a flat out ban, but the system is set up to discourage overtime.

      My husband used to work for a company that really stretched the overtime rules to the limit. They had a branch in Germany and management was always complaining that the Germans didn’t work overtime–but the German office was just as efficient because they didn’t have a burned out, frequently turning over workforce.

    5. Princess Consuela Banana Hammock*

      I think the difficulty is that in many parts of the country, a non-exempt salary is still higher than a 40 hours/week salary. Given how low the minimum wage is for those areas, if people have to choose between 70 hours, no overtime, at 1.5x minimum wage, that’s going to be (theoretically) better than 40 hours, no overtime, at minimum wage.

      I’m not saying that we should leave the rule as-is. I just think employers are going to chase whatever method they can to minimize costs, so fixing this problem probably requires changing more than just the exempt/non-exempt salary test.

      1. High Score!*

        I studied a long time and worked hard to get the experience to have a higher salary, does that mean I should work more hours without being paid for them?

        It’s 2017, the number of hours we work hasn’t decreased in decades. It’s 2017, we have automation, we have 30% of the US population getting public assistance. How about we set the work week at 30 hours for EVERYONE and we use more automation, and have more of our population working, but all working less hours, thus a better life for everyone.

        1. Lora*

          I agree with this. Especially the automation part. Automation is a huge help in taking care of my elderly mother, although she doesn’t think of it that way: Instant Pot, safety controls in the car she drives, drug pumps, GPS, voice controls on her phone, all help her stay out of an assisted living place. Otherwise she surely would have had multiple serious car crashes (she was already having them before we got the new car), burned down the house, gotten lost forever, etc. I can’t do all her housework, but I can switch on a Roomba for her.

        2. Princess Consuela Banana Hammock*

          I’m not saying the rule is right or fair. I just think people who are in economically precarious or desperate circumstances, where there are few job opportunities, would take the 50% greater salary even if the working conditions are awful. And I think they’ll do it because their other alternative is to starve, become homeless, or forego other necessities.

          I also think automation is unrealistic for a lot of jobs. It’s certainly eliminated thousands of jobs, but there are still thousands where you simply cannot switch to automation. If we want large-scale improvements, companies have to be incentivized to want to do right by their workforce instead of focusing (as they’re legally required) exclusively on profit-chasing for their shareholders. But when you have a systemically dysfunctional system, there’s not really one silver bullet policy that can fix it.

          I don’t think that means people shouldn’t fight for better conditions—they should. But part of why so many of these efforts feel frustrating or inadequate is because they’re trying to address problems on the back end; they’re not trying to make systemic changes.

    6. OldJules*

      I maybe wrong but my friend whose husband works in Germany gets OT if he gets asked to work over the standard working hour. He is an engineer. I am so jealous :D

  5. Anon Anon*

    Interesting. I would be surprised if the DOL enact anything, but the questions they’ve asked are interested (and reveal their agenda to some degree). The overtime rule, I believe, was designed so that relatively high wage workers didn’t receive overtime. I don’t think it was ever created with the intent that so many people could be classified as “exempt”. At the very least it needs to be adjusted for CPI linked inflation, which would bring the amount up to 33-34K. I don’t think that is personally enough, but to me that is a very business friendly reasonable adjustment.

  6. ReadItWithSpanishAccent*

    I absolutely don’t understand this regulation: If you work overtime, you must get paid. Period. If you don’t get paid, you should get the same amount of hours for free. Only few employees (C-suite mainly) do not get overtime, but because they have high flexibility and it is considered a part of their bonus.
    How can they expect people to work for free?

    1. ReadItWithSpanishAccent*

      I see I misspoke: with “the same amount of hours for free” I mean getting free time, paid holidays, compensatory time off…

    2. Kiki*

      >If you work overtime, you must get paid.

      The problem is that many companies don’t pay out overtime because they classify people as exempt when they shouldn’t be. My current job is the first of four that has ever paid me OT, even though Alison mentioned above (in a reply to my comment) that I should have been classified as non-exempt in my past jobs and paid OT. But I didn’t know that, I was told by my past companies that I was salaried exempt and that was that.

      1. Hey Karma, Over here.*

        My first full time job in my field. I’d temped for six months, they decided to hire me. Yay. OK, we’ll pay you $2 more an hour. You’ll get medical, dental and vacation days. You’ll work the same 60 hour week you’ve been doing, but the job is classified as management. It’s wrong and probably illegal. Do you want the job or not?
        Yup.

    3. High Score!*

      I’m an engineer, I don’t get overtime, neither does anyone else who works here at this fortune 100 company that isn’t hourly.

        1. the gold digger*

          Come work at my company. The engineers (who are often on site over weekends) get straight time and get comp time. (I don’t know if they get both for the same OT hours worked, though.)

          Drawback – new corporate owners just told us our personal days – which were pitched to me as extra vacation days when I got my job offer – are now sick days and you have to be sick to take them. Cough cough.

      3. OlympiasEpiriot*

        My company has the engineers get straight time. People classified as drafting, technical (like the laboratory workers) and admin get proper OT. But, if we work, we get paid. The partners have a different method, but they get a different compensation structure over all.

  7. Hot Yoga*

    Thousands of comments are a copy and paste of the same wording, where is this coming from? It’s like a petition.

    “Alexander Acosta,

    Back in 1975, President Gerald Fords Labor Department set the salary level for overtime exemption at the equivalent of about $58,000 in todays dollarshigh enough to cover more than 50 percent of full-time salaried workers. The Obama-era rule set it at $47,476high enough to cover about 34 percent of full-time salaried employees but lower than the level that it was in the 1970s. Thats why the salary threshold should be at least $47,476; and without indexing, the overtime pay rule will continue to erode and not keep pace with inflation.

    When fully implemented, this updated rule extends overtime eligibility to 4.9 million more working people and makes it harder for employers to deny overtime to another 7.6 million working people who are already eligible.

    I urge the Department of Labor to implement the new overtime rule, keep the salary threshold at at least $47,476 and keep the indexing to protect the rights and wages of working people. The whole point of having national standards is to ensure decent basic standards for all workers. The updated overtime standard is already linked to the lowest-wage Census region. Workers rights and wages should not be undercut even further by weakening the salary threshold.”

    1. NP*

      It’s a form letter campaign. Extremely common on rulemakings and RFIs. They are typically organized by an organization that has a stake in the subject. Unique submissions (comments that are not form letters) for something big like this probably only account for 5-10% of the submissions received, if that.

  8. Ann O'Nemity*

    Sigh. Consider me annoyed.

    My company went through all the rigamarole of reclassifying and raising salaries last year. I’m not excited to do that again to meet whatever the new rules are.

    Don’t get me wrong; I do believe that the overtime rule needed updating. I’m just annoyed at the process thus far.

  9. Jake*

    I’d love to see this regulation get simplified down to something like, if you are not the business owner, you get paid for all overtime hours.

    That will never happen of course, so a good start would be adjusting for cost of living within the threshold, and raising the threshold to a point where people that are exempt must be in the top or second to top quintile of earnings.

    That might not be high enough to completely eliminate the duties clause though.

    1. A. Schuyler*

      The biggest issue with your “business owner” test is for listed corporations. My employer is owned by thousands of individual and corporate shareholders, including a vast majority of the staff via employee share plans.

  10. Hazelthyme*

    Is it just me, or is anyone else having trouble reading US News articles linked from AAM on a smartphone? (I’m on iOS 10.) When I click the “Read it here” link, I get a US News page with the title & Alison’s photo/bio, but then it goes right to the list of other related articles I might enjoy without actually displaying the one I’d clicked through for in the first place.

    1. Cercis*

      I’m on a laptop and it kept jumping to the bottom of the page. I had to scroll up about 5 times before I finally decided I’d gotten the gist and gave up. Something in their bots are not running well.

    2. Perse's Mom*

      I’m seeing the same thing, though I’m on my PC, so it doesn’t seem to be a mobile-specific issue.

  11. Maude*

    I am fortunate to be an exempt employee whose employer rarely expects over 40 hours per week in addition to being flexible with my schedule. I am concerned that making my position non-exempt would cause my employer to track my hours more closely, which is a hassle, and I would lose some of the flexibility of shifting my schedule and occasionally working from home. When I do have to work extra hours it is usually for a project that I am really into, or frankly, because I have not used my time especially efficiently that day. It is a give and take.

    1. Awkward Interviewee*

      Yep. It annoys me that everyone thinks that everyone wants to be nonexempt. My job has busy times and less busy times. I may work over 40 hours a week a few months out of the year, but other months I can work less than 40, and no one cares (as long as my work gets done well). I’d rather have the flexibility than overtime pay. Employers in my field also often offer better benefits to their exempt staff, so getting reclassified would be a huge negative for me. I totally get that some workers – like fast food managers – are getting taken advantage of, but that seems like a duties test problem, not a salary threshold problem.

      1. Princess Consuela Banana Hammock*

        I don’t think anyone thinks that. Not sure where you’re getting that from?

        1. Awkward Interviewee*

          Ok, sorry, “everyone” was hyperbole. But a lot (most?) of the comments above are along the lines of “Everyone should just get paid overtime. Period.” And that just doesn’t work as well for certain fields.

      2. Lucie*

        There’s a lot of us who are exempt but our companies still make us clock in and out and track that we’re making at least 40 hours of work a week too.

        1. Cercis*

          Yep, DH’s office (a gov’t agency) is like that. He has to show at least 40 hours each week, but can’t show more than that (don’t even get me started on him having to lie on his official timesheet). They insist on 40 hours each week, period, but you don’t get credit for over 40 hours, unless you take it off in the same week (so if you’re planning a Saturday event, you can take time off during the week – but then if the Saturday event gets canceled, which happens about 10% of the time, you have to take vacation time to make up the hours you’d tried to flex, or just figure out something to fill your time on Saturday when you’d planned to be at the event – but the office isn’t open, so you can’t go into the office …).

          I’ve actually never known a place that said “when your work is done, you’re done” which should be the case. Every place I’ve known or worked said “we have more than enough to fill in 40 hours each week, if YOUR work is done, check and do someone else’s backlog. Oh and if you work more than 40 hours, well work harder and get it done.” There’s no reciprocity.

          1. Kiki*

            >I’ve actually never known a place that said “when your work is done, you’re done”

            I’d be interested to hear what jobs and industries have this policy. I’ve seen it mentioned in AAM comments but have never met someone IRL who can leave work before 5 pm simply because they’re done with their work that day. Usually it’s the case that you find a way to fill your time from 8 am-5 pm (or similar), have to work longer if you’ve got more work to do, and flexibility to leave early or come in late only extends to non-frequent one-off things like dr.’s appointments.

            1. ThatGirl*

              When I was a newspaper copy editor, we got to leave for the night once the paper was done/to bed. I was hourly/non-exempt but it was understood that on the rare miracle nights we worked less than 8 hours, we would just write 8 hours on our time sheets.

            3. Gabriela*

              I am an exempt staff member of a public university. The expectation is that we put in 40 hours per week between the hours of 8 and 5, but in practice no one really bats an eye if you leave an hour or two early or if you take an extended lunch to run errands, so long as the student-facing offices have coverage. However, it would definitely not fly if you left at 3 EVERY day or if you just decided to work 10am-7pm sometimes because you felt like sleeping in.

              We also have generous PTO, so even if you’re department head is a stickler for time-tracking, our sick-time bucket is pretty deep.

          2. Emi.*

            I work for the feds. If I work >8 hours a day, I record it as “credit hours,” which I can use like leave directly in the same pay period or in another (I can acrue up to 24 credit hours). This requires a leave request (which my boss has never denied). Falsifying timesheets is one of the few things I can be fired for.

            1. Soon to be former fed*

              In my agency, credit hours do not require a leave request, they are just coded differently in our payroll system.

              1. Soon to be former fed*

                Oh, and credit hours can be earned only after 80 hours a pay period have been reached. We have a maxiflex system though, so there is no 8 hour day requirement.

        2. Anon for Sure*

          Until about a year ago, my employer made every employee clock in and out regardless of their exempt or non-exempt status. And until about five years ago, if any exempt employee clocked in less than 45 hours (and it was time clock so there was no fudging) they would be reprimanded.

      3. Elsajeni*

        My situation is similar, except with the added bonus that, because I work for a state-funded university, there’s no budget to pay me (or anyone else) for overtime — they did switch a lot of us to non-exempt status last year, but with comp time instead of overtime pay, and with clear instructions that we were to bank as little comp time as possible and use it within a short time period. So I have less flexibility, the same pay, and the new hassle of trying to find ways to use 0.3 of an hour of comp time before I get scolded for carrying it for too long.

        (I do, in general, think the increased salary threshold would be a good thing and wish it had gone through for everyone! I just happen to have exactly the combination of circumstances — earning close to but just under the new threshold, rarely asked to work overtime anyway, and a highly bureaucratic employer — for it to create more hassles than benefits for me personally.)

  12. UnderpaidAnon*

    There was a brief, glorious period where my employer scrambled to figure out what to do with the mass of us making less than $47,476 because the mangers readily acknowledge how much overtime occurs. Only thing that could top that would have been actually getting bumped up to that amount, which I was told was going to be the case for me.

    Instead, last I heard is that we’re all getting “generous” 2% raises this year. My sympathies to those of you not getting raises at all… it just stings. Bring back the $47,476!

      1. ThatGirl*

        My husband lost out on both a raise and a shortened work-year; he’s a staff member at a university and they were going to prorate the salary to a 10-month calendar year and he’d have gotten a good chunk of the summer off. Instead he’s still being paid <$40k a year and hasn't gotten a raise (well he got one raise but then everyone took paycuts, but this has more to do with financial mismanagement than anything).

    2. Quacktastic*

      Somewhat off-topic (abbreviating that as OT in this thread seems unnecessarily confusing), but is 2% a bad raise? What is typical? I’m relatively new to the workforce and management said the average raise they gave was 2%, so my 2.8% raise was comparatively outstanding.

      (I mean, I’ve felt pretty happy – overall, I’ve gone from the bottom of the salary range to the very top in 5 years. But sometimes I read this site and realize things like 3 sick days a year or not having any sick/vacation/personal time for the first year of employment aren’t normal.)

      Back on topic, I’m salaried exempt but do get OT (health care, so shifts need to be covered and nobody would work an extra 12 hours for free), but higher ups are entirely salaried and definitely put in 60-80 hours per week without OT. I have no idea how corporate would handle the new OT rule for them – the management position 3 tiers above mine that’s currently covered by 1 person should really be a job for 2, but they don’t want to pay 2 people to do it.

      1. copy run start*

        It’s not a necessarily a “bad” raise in my book, just okay. 2% is barely keeping up with inflation most years, so it can end up not really being a raise. For a high COL area or a place where inflation is running higher than the national average, it might be disappointing. Of course it may be pretty typical for your company/industry/area, but it’s hard to say without knowing your specific situation.

      2. Kiki*

        I don’t know if there’s such a thing as a “typical” raise anymore. I work in nonprofit admin and at my first three companies raises were basically unheard of, not even COL raises. But at my current company there’s almost always a 2% COL raise every year with the potential for a merit raise. I received a 10% merit raise this year (on top of my 2% COL) but I implemented whole new systems and took on more higher-level tasks than my job originally called for so I’m basically getting paid market rate for my new job duties.

        For other examples, my husband is a software developer who has never received a raise before and my best friend is an accountant who gets a 2-5% raise every year. We’ve all been in the workforce for 10 years.

      3. UnderpaidAnon*

        To clarify my snarky use of “generous,” I was going to get a ~6% raise assuming the law went into effect. That makes 2% unfortunate in my view, knowing what I was going to get! BUT, I’m also in a high COL area and 2% won’t cover the rent increase I will experience so I’m bracing for that as well since my rent is already at about 50% of my income… *sigh*

        It’s actually not uncommon in my office for people to get no raise at all. Historically, 2% is decent. Unsurprisingly way too much of our staff fell under that federal minimum though, so not sure I’m the best gauge of normal, ha!

  13. Lady*

    I have a personal grudge at the moment, because I just accepted a position at a university that has previously been considered exempt, but is under the threshold so is now non-exempt. In the university setting, that means 12 vacation days per year instead of 22. We’ll get comp time, but it’s not the same. I hope that they get this sorted.

  14. Lora*

    “Should the 2004 salary test be updated based on inflation? If so, which measure of inflation?
    Yes. But the two basic measures the US uses, CPI and PPI, are both problematic. To address housing bubbles, something like the UK CPIH; Social Security uses CPIW which is based on a narrow demographic that can skew far from a standard distribution so I’m not really a huge fan.

    Would duties test changes be necessary if the increase was based on inflation?
    Hard to say. I lean towards no? At least no change from the plan that got put on hold.

    Should there be multiple salary levels in the regulations? Would differences in salary level based on employer size or locality be useful and/or viable?
    Levels no. That’s sort of the point and seems like it would be an invitation for discriminatory nonsense and shenanigans. Locality yes, size no.

    Should the Department return to its pre-2004 standard of having different salary levels based on whether the exemption asserted was the executive/administrative vs. the professional?
    NO. Duties are all over the place anymore, it’s not a real thing exactly. Work is work.

    Is the appropriate salary level based on the pre-2004 short test, the pre-2004 long test, or something different? Regardless of answer, would changes to the duties test be necessary to properly ‘line up’ the exemption with the salary level?
    Short test comes closest to what would be fair-ish. The long test seems like an invitation for shenanigans with duties and job descriptions.

    Was the salary level set in 2016 so high as to effectively supplant the duties test? At what level does that happen?
    No, it depends on location too much.

    What was the impact of the 2016 rule? Did employers make changes in anticipation of the rule? Were there salary increases, hourly rate changes, reductions in schedule, changes in policy? Did the injunction change that? Did employers revert back when the injunction was issued?
    For me and my field no real change.

    Would a duties-only test be preferable to the current model?
    NOPE.

    Were there specific industries/positions impacted? Which ones?
    Retail and food service for sure!

    What about the 2016 provision that would permit up to 10% of the salary level to be satisfied with bonuses? Should the Department keep that? Is 10% the right amount?
    Yeah, that’s OK. Bonuses are good. Incentives to give bonuses are also good.

    Should the highly compensated employee exemption salary level be indexed/how? Should it differ based on locality/employer size?
    Location. A job that needs to be done in a high cost of living area is still a job that needs to be done in a high cost of living area. If employers can’t afford to pay enough to get someone at market rate in a high cost of living area, there are many other areas to choose from which would undoubtedly be delighted for the employment.

    Should the salary levels be automatically updated? If so, how?”
    YES. Social Security updates COLA annually, no reason DOL can’t as well.

  15. Jesmlet*

    Still not sure how this’ll work considering my salary is below the threshold but my salary plus commission is way over. Not that it matters… my employer has 15 people and will likely ignore whatever the ruling will be which IMO is a good thing. None of us ever work overtime anyway so it shouldn’t make a difference.

    1. Jessie the First (or second)*

      Why is it a good thing if your employer ignores DOL regulations? If you never work overtime none of it would be relevant to you, really, anyway, but I am curious about why you are in favor of your employer ignoring the law.

      (And I don’t mean that to sound snarky – I am honestly really wondering.)

  16. De Minimis*

    I was sort of glad they backed off on the rule just because it was adding unnecessary expense for my employer [a nonprofit.] Everyone was exempt, both under the old and new rules, but we were going to have to buy a labor law poster anyway to give people notice of the law which didn’t really affect them.

    1. ThatGirl*

      Wait… are you saying the only new/unnecessary expense would have been buying a new labor law poster? Is that really that big of a deal?

      1. De Minimis*

        All I’m saying is that it made my job easier when I found out we didn’t need to worry about buying a new poster. I’m in HR, and there are so many required disclosures. Anything that reduces my workload is greatly appreciated. And yes, even though it was probably only $20-30, that was $20-30 that we didn’t have to pull out of our programs for something that did not affect any of our employees to begin with.

          1. copy run start*

            Yes, you can print off all the required federal postings online! I’d be surprised if there was a state with postings you couldn’t print either. There’s usually a revision date listed on the postings to make it easy to know if yours is out of date. Unfortunately many employers are unaware of this and are hit up by scammers charging $30/poster and promising dire consequences if you don’t purchase one.

            In my state at least, the state DOL will deliver/mail you a nice 5-in-1 poster at $0 charge. All you have to do as an employer is call or email them, as far as I know there isn’t a limit on quantity either. Some years there actually aren’t even changes to the wording, so a call is always worth it.

            1. De Minimis*

              I will look into this for the future. I am new to HR and wasn’t aware of this [and apparently neither was our finance director, nor the many HR staff we used to have back when we had a full time HR staff.] Apparently everyone at my job has just been paying the state chamber of commerce every year for the last couple of decades.

              Prior to this, I worked for a federal agency where we also paid for posters each year.

              We also have local posters [the city has a higher minimum wage that is about to get to $15 with the potential to go up further] so I don’t know if there would be an alternative to that.

              Of course, I am in California so it may actually be required to buy posters….

              1. copy run start*

                Hmm, CA law is so different; afraid I don’t have much advice there than try your local DOL office.

                If you search for “us dol required posters” you should get a link that has all the federal postings available for download though!

  17. Gaia*

    I just had to do battle with an hourly employee that kept insisting on trying to take comp time instead of being paid OT. He’s work 50 hours week 1 and only log 40 hours and then try to work 30 hours week 2 and log 40 hours.

    We went round and round in circles about how that is what he wanted to do and so on. Finally I had to tell him it doesn’t matter if that is what he wants, it matters that he legally cannot receive comp time. He is hourly non-exempt and doesn’t meet the duties test to be exempt.

    I’ve never had to argue so hard to pay someone what they were owed….

  18. amanda_cake*

    I work in higher education admissions. With the amount of travel we do, I am concerned as to how this will impact us, with all the trips we take.

  19. James*

    I was took two days of vacation Monday and Tuesday. However, I returned to work Wednesday and worked through Saturday. I ended up working 52 hours, 16 as vacation that week. When I turned in my timesheet, my boss told me, they didn’t want to pay me that much overtime so they gave me back a vacation day and only paid me for two hours of vacation. Is that possible? I wouldn’t have worked overtime if I thought I wasn’t going to get paid for it.

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