“How to Tell Your Salaried Employees They Are Now Hourly”

With the new federal regulations set to kick in December 1, this oft-unwelcome news will reach many employees just too late for them to take out any resulting upset on the politicians who encouraged or permitted it to happen [Evil HR Lady, earlier]

8 Comments

  • Thanks for sharing! This is the fourth article I’ve written on the topic and they’ve all done wildly well–people are so shocked to learn how much power the government has over their lives.

    Lots of people are going to be shocked when their paychecks change, and I suspect a lot of companies aren’t going to be very good at explaining this beforehand.

  • Was once working as a contractor and earning occasional overtime. Even so, the “parent” was charging double time for my overtime, but only paying me half (my salary, not their much larger “cut”). To make more money, all contractors were converted to salaried. Usually, when this conversion takes place, your hourly rate is multiplied by at least 2,080 (52 weeks X 40 hours). Instead, the firm chose 1,980 (taking out the “vacation” days). Any time the company says you are going to make more money, you are will make less.

  • If you are a software developer, does this mean you would be required, by law, to stop working on hobby project such as open source tools, if you have a (typical) labor agreement that means your company owns all of your IP/out-of-hours development, or uses those same tools that you are working on as a hobby?

    Is this a signal to turn many more employees into independent contractors?

  • So in a “closed shop” company, how many of the people who are being changed to hourly will be forced to join the union?

  • Walter, you seem to be a big proponent of not paying people beyond 40 hours. I’m sure your clients are truly grateful that you stop billing at that point, regardless of how many hours you’ve put in on their behalf that week.

    I really do admire people that live up to their ideals.

    • ^^^^^ Person who 1) thinks I’m an attorney and 2) thinks I bill by the hour.

      Remember that we were all newbies once, so don’t be too mean to NoOT.

    • NoOT,

      You really missed the mark on this one.

      As one who has been around here for awhile, I can tell you that Mr. Olson has never argued against paying people for working over 40 hours. What he has argued against is the government’s insertion into employment contracts between two private entities. (ie the employee and the company.) If a person and a company agree to overtime for more than 40 hours, the company should pay.

      However, the “40 per week” is completely arbitrary. Why not 50 hours before overtime? Why not 30? If I am happy with the money I am being paid by my company and my company is happy as well, why should the government have any say in the matter at all?

      In the book “The Right to Earn a Living,” author Timothy Sandefur gives this hypothetical:

      A bakery has more orders than normal and he asks one of his bakers who is at the 40 hour mark to bake more loaves of bread for him. The baker wants to make more money for Christmas or his kid’s college fund or whatever. He is willing to work more hours at his basic rate. But the bakery can’t do that. They have to pay him time and a half so the bakery goes to another baker who hasn’t crossed the 40 hour threshold and gives the work to him. The bakery cannot reward their employee with the extra work without incurring a penalty and the baker is out the extra pay.

      Certainly no one is for forcing the first baker to work the extra hours, so if he and the bakery agree to the hours and pay that is mutually beneficial to both, why not allow it?

      Why does the government insert itself into an agreement like that? Are they saying that they know more about businesses and adults can’t make their own decisions in their own best interests? Are we children who need to have our economic freedom curtailed by an unelected bureaucrat?

      Finally, from the Evil HR Lady’s post:

      What if I want to work more hours? I’m willing to do it without extra pay.

      You may not do this. Federal law prohibits you from working unreported hours.

      Here I thought that my work and my talents were mine and I was free to distribute and use them as *I* see fit, not as the government sees fit. Why must an adult seek the approval of the government to work or donate their time and skills?

      (This happens in elections too. A small town near me restricts donations to candidates to $250. The state requires all “in kind contributions” be considered as a cash donation and a value assigned to the work. So if I normally charge $500 for a logo, basic branding and brochures as a graphic artist, I am barred by law from donating my talents to a campaign. I have to wait and either give money or take money from the campaign. Please tell me why that should be?)

      I own my skills, my craft and my labor. The government has no business treating me like a slave and telling me what I can and cannot do with it.

      BTW – welcome to the forum.

  • So, a mea culpa: despite having read this site on and off for a VERY long time (15 years sounds about right) I’m apparently too stupid to realize that Walter is not himself a lawyer. All I can say about that is “sorry for making the very poor assumption.” My snarky point is obviously invalid as a result. Open mouth, insert foot, echo internationally.