Becoming a salaried employee

[oobiecoo]

DH got a raise today (yay!) but it is because his employer is making him salary based instead of being paid per hour. He already works overtime a lot and doesn''t get paid for it... it just accrues and he uses it for vacation or whatever. At the end of his time there they will pay out his overtime. So really there has never been an incentive to working late hours/overtime since he doesn''t get paid any more than for his 40 hours per week. I''m worried now that he is going to be on a salary, that his employer will have him working even more overtime with absolutely NO incentive. Does anyone have any experiences with this sort of thing? Is it reasonable to ask his boss to guarantee he won''t work more than 45 or so hours per week? His raise isn''t huge but is helpful... I hope his employer doesn''t see this as a way to work my husband to death.

 

[fleur-de-lis]

Will he now be given health insurance, 401k matching, and other benefits? Will his SSN contributions go down from 15.x% to about 7.5% by going from 1099 to W2?

If so, it may have been a better raise than at first glance.

 

[oobiecoo]

He won''t be receiving any more benefits than he currently has.

 

[meresal]

I wouldn't go in and ask if his boss will promise not to have him work more than he works now. As a manager, that would not lead to good places... however, I do think it is perfectly logical to ask his boss, where the benefit is, for your SO as an employee and looking out for his best interests, to become salaried? Does he have a better chance at opting for higher positions if he is a salaried employee? If he works for a large compnay, then a salary may show "status" with the company. These are some hidden benefits that I can think of.

If he is pretty open with his boss, or even a mentor in his office, these are questions that any boss with an open door policy would be happy to answer.

 

[chrono]

I wouldn''t ask about trying to limit the hours worked per week. What you can do is check the company policy to see if compensation time is offered. Some companies allow some time off for working holidays or weekends.

 

[elrohwen]

Both myself and FI work in salaried positions and there's no way of getting around working lots of overtime if that's what happens. He might get lucky and his boss could let him take some vacation days if he has to work on the weekend or something (mine does) but I wouldn't hope for much. FI and I both work over 50 hours most weeks, but we're only paid for 40 (technically). That's just how salary goes. I wouldn't be surprised if his boss would prefer him to be salaried so that no overtime is paid.

ETA: I agree with the others that asking his boss about working no more than 45 hours a week is not a good idea.

 

[AmberGretchen]

Ditto everyone who has already answered. I think if your DH could find ways to ask about what is "expected" or "different" as a result of the switch, that could potentially be helpful, but even then its not like the manager will say "I''m doing this so I can make you work extra hours and not have to pay."

I think your DH will just have to try to find ways to politely but firmly set limits on his work time if he feels he''s being expected to work unreasonable hours. Some possible ideas include: asking his boss which are the most important priorities at any given time so he can focus just on those as necessary, and stressing the importance of leaving at a certain time each night, except in case of emergency.

I think that being open about expectations of what your DH''s job should entail not in hours but in what he''s expected to actually accomplish will be the most helpful in making sure his hours don''t get unreasonable.

 

[Haven]

Date: 3/9/2009 9:13:08 PM
Author: AmberGretchen
Ditto everyone who has already answered. I think if your DH could find ways to ask about what is ''expected'' or ''different'' as a result of the switch, that could potentially be helpful, but even then its not like the manager will say ''I''m doing this so I can make you work extra hours and not have to pay.''

I think your DH will just have to try to find ways to politely but firmly set limits on his work time if he feels he''s being expected to work unreasonable hours. Some possible ideas include: asking his boss which are the most important priorities at any given time so he can focus just on those as necessary, and stressing the importance of leaving at a certain time each night, except in case of emergency.

I think that being open about expectations of what your DH''s job should entail not in hours but in what he''s expected to actually accomplish will be the most helpful in making sure his hours don''t get unreasonable.

Ditto, again. I would ask more about the expectations regarding production (or whatever it is, I don''t know what he does) rather than hours worked. It''s definitely a reasonable question to ask.

If this turns out to be a good thing, CONGRATS!

 

[oobiecoo]

Thanks for the replies... its so nice to have extra insight. To answer some questions/concerns... my DH is the only employee for this company. The owner and his wife are the only other workers. So the salary doesn''t give him any special status or ability to move up in the company... because there really isn''t anywhere to move to. As far as figuring out work priorities and trying to limit himself in the number of hours he works.... He is a computer tech and the company''s policy is to respond immediately to critical problems customers are having. The problem is that this often leads to my husband working until midnight because his boss often sees EVERY job as critical. Its just frustrating and I have a feeling that becoming salaried isn''t necessarily a good thing for DH.

Instead of asking his boss to limit overtime hours, would it be ok to ask if he plans on asking him to work more hours than he currently does? He works at least 50/week right now. We are happy about the raise and grateful that he has a reliable job when people are losing theirs left and right... I just hate to see him so exhausted all the time.

 

[strmrdr]

9 times out of 10 salaried == the shaft.
But since he is already getting the shafted it might not be a big deal.

In many states what they are doing is illegal for a per-hour employee which might be why they are changing it.

 

[VRBeauty]

The expectation of a salaried employee is that they will put in the time needed to complete the job. The flip side (which many employers conveniently forget) is that they do not have to track time off if it occurs in less than 8-hour increments -- in other words, showing ups for two hours a day is the same as showing up for 8 hours a day, as long as the job gets done. A salaried employee should not get docked for time taken off during the day for medical appointment etc. and should not ne clocking in and out, even informally. There are provisions for taking compensating time off if one has to work extraordiary hours (i.e. weekends), but I'm not clear on those provisions. I think the key to going into a salaried position is to be clear on the 'job description" and expectations.

There have been companies that really tried to exploit the salaried classification by claiming that most or all of their employees were "managerial" and therefore exempt from overtime. I think it was a fast food chain that tried to use that ploy to get out of paying overtime, and got called on it! As I recall at least some of that was turned back by the court, the key being the amount of self-direction expected of the employee.

Anyhow, the term to Google if you want to find out more about it is "FLSA Exempt." I happen to like the class (even though my employer no longer offers direct financial benefits, like 401K contributions

) because to me, the concept of putting in the time needed to do the job is just much more professional that worrying about what does and does not constitute "work time," especially when I'm travelling. I've had years when "what's needed to do the job" consumed faaaaar more than 40 hours per week, and years when I my work fit reasonably within a more or less regular work week. I guess I should add that I have no choice, so I may as well like it!

Your DH should definitely look into what's expected with exempt status at his workplace, what benefits (if any) come with it, and he should make sure he's aware of the requirements for FLSA exempt positions.

 

[Italiahaircolor]

Of course you don''t want to see your husband overworked...but it''s important to remember that with certain jobs, esspecially technology, it''s an on-call job no matter where you work, and putting in serious hours is just part of it. In my company, we have a small number of technology people and I know for a fact that they are continually overworked because less computer savvy people (such as myself) constantly need them. And, what may seem like a minor problem to your husband may actually stop them from getting their work done...so by accepting this job he''s also accepting the responsibility to keep the company running 24/7.

Now, as far as asking to limited hours...I would highly caution against that. In today''s world there are many people that would line up to take his place in a second if he starts making demands...and his bosses probably know that. The owners seem like they are fair with him, offering him a raise and all. But honestly, practicing gratiude for the opportunity and job in our current economic climate is probably what your husband should be striving for. I''m sorry he''s exhusted and overworked, but you need to always keep in mind that their are people who would love to be tired or overworked if it meant bringing home a solid paycheck and covering their bills.

Congrats on the raise and good luck

 

[Hudson_Hawk]

Date: 3/9/2009 11:53:51 PM
Author: VRBeauty
The expectation of a salaried employee is that they will put in the time needed to complete the job. The flip side (which many employers conveniently forget) is that they do not have to track time off if it occurs in less than 8-hour increments -- in other words, showing ups for two hours a day is the same as showing up for 8 hours a day, as long as the job gets done. A salaried employee should not get docked for time taken off during the day for medical appointment etc. and should not ne clocking in and out, even informally. There are provisions for taking compensating time off if one has to work extraordiary hours (i.e. weekends), but I''m not clear on those provisions. I think the key to going into a salaried position is to be clear on the ''job description'' and expectations.


There have been companies that really tried to exploit the salaried classification by claiming that most or all of their employees were ''managerial'' and therefore exempt from overtime. I think it was a fast food chain that tried to use that ploy to get out of paying overtime, and got called on it! As I recall at least some of that was turned back by the court, the key being the amount of self-direction expected of the employee.


Anyhow, the term to Google if you want to find out more about it is ''FLSA Exempt.'' I happen to like the class (even though my employer no longer offers direct financial benefits, like 401K contributions

) because to me, the concept of putting in the time needed to do the job is just much more professional that worrying about what does and does not constitute ''work time,'' especially when I''m travelling. I''ve had years when ''what''s needed to do the job'' consumed faaaaar more than 40 hours per week, and years when I my work fit reasonably within a more or less regular work week. I guess I should add that I have no choice, so I may as well like it!

Your DH should definitely look into what''s expected with exempt status at his workplace, what benefits (if any) come with it, and he should make sure he''s aware of the requirements for FLSA exempt positions.

Ditto.

People don''t realize that there ARE laws that protect salaried employees from being overworked in the name of "salary". I don''t know the specifics, but there''s a limit to the amount of time you can work without additional compensation on top of your salary. The form of compensation is up the the employer but it has to be either money or "comp" time. Bad economy or not, these are your FI''s rights and he''s entitled to them. If the company breaks the law and abuses him and then fires him if/when he calls them out on it, then he has a case against them. Given that the company is very small, the owners probably don''t realize the possible ramifications of making him salary to get him to work long hours without paying overtime. I''m sure the overtime pay is their motivation here.... FI was hourly at a previous job, he made about $30K from hourly pay and another $40k in overtime on top of that. The boss wanted to make him salary at $45k, and he told him to stuff it and changed jobs.

 

[soocool]

Under the Fair Labor Standards Act (FLSA), as a salaried employee your DH is considered an "exempt" employee and as a hourly paid worker he is "non-exempt:. You may want to check this site out to see if your DH was fairly compensated before he became a "salaried" employee first before he talks to his boss. Being such a tiny company your husband may not have a choice

http://www.dol.gov/esa/whd/regs/compliance/hrg.htm#15


This links handles what is can be considered an exempt-employee: http://www.dol.gov/elaws/esa/flsa/screen75.asp - see the part about computer professionals.

 

[soocool]

This part of the FLSA covers minimum Wages:

SEC. 6. (a) Every employer shall pay to each of his
employees who in any workweek is engaged in commerce
or in the production of goods for commerce, or is employed
in an enterprise engaged in commerce or in the production
of goods for commerce, wages at the following rates:

These are the exemptions to minimum wage:
SEC. 13.63 (a) The provisions of sections 6 (except section
6(d) in the case of paragraph (1) of this subsection)64
and 7 shall not apply with respect to —

(17) any employee who is a computer systems
analyst, computer programmer, software engineer, or
other similarly skilled worker, whose primary duty is —
Exemptions
(1) any employee employed in a bona fide executivere engineer, or
other similarly skilled worker, whose primary duty is —
(A) the application of systems analysis techniques
and procedures, including consulting with
users, to determine hardware, software, or system
functional specifications;
(B) the design, development, documentation,
analysis, creation, testing, or modification of
computer systems or programs, including prototypes,
based on and related to user or system
design specifications;
(C) the design, documentation, testing, creation,
or modification of computer programs related
to machine operating systems; or
(D) a combination of duties described in
sub-paragraphs (A), (B), and (C) the performance
of which requires the same level of skills, andwho, in the case of an employee who is compensated
on an hourly basis, is compensated at a rate of not
less than $27.63 an hour.

I know this does not help with the overtime issue, but if your DH falls into this exempt category hopefully he comprensated more that the $27.63 /hour listed here.

 

[omieluv]

You can research the FLSA and other laws related to work status, but in this economy, it really is an employers market. All of my friends are Exempt and they all work 50-60 hour work weeks, just to stay on top of everything. Some have it better than others, where they can work flexible hours, however, not all have this luxury. My BF is the same way, he puts in 55 hours per week as well and is on Exempt status. Some weeks are harder than others, but he does it because most, if not all jobs at his level are Exempt status. I am on Professional Exempt status, which means I do not get OT pay, but can continue to earn my regular wage for every hour over 40 hours. However, my company has been going through budget cuts and some employees have been let go, so I do not log in hours over 40 so I do not appear to be too expensive.

With regards to your husband, he might end up working more, or he might end up working about the same amount of hours. As someone else explained, it might be a good idea for him to sit down with the owner to find out if there will be any new expectations regarding the switch. Some days might be long and others shorter, but like you said, he has a job and received a raise, which is a miracle in this economy. My BF did not get his bonus this year, but they gave him a raise that made up for half of it and he got a promotion. He was very upset because this meant that he would be putting more hours in and not being paid at a level justifying the role. However, I explained that he cannot be too picky because he is gaining valuable experience that he can take to another company down the road. Also, I reminded him that just having a job right now is a blessing & even getting the small bone they threw at him was at least something.

 

[oobiecoo]

Date: 3/10/2009 10:47:12 AM
Author: soocool
This part of the FLSA covers minimum Wages:


SEC. 6. (a) Every employer shall pay to each of his

employees who in any workweek is engaged in commerce

or in the production of goods for commerce, or is employed

in an enterprise engaged in commerce or in the production

of goods for commerce, wages at the following rates:


These are the exemptions to minimum wage:

SEC. 13.63 (a) The provisions of sections 6 (except section

6(d) in the case of paragraph (1) of this subsection)64

and 7 shall not apply with respect to —


(17) any employee who is a computer systems

analyst, computer programmer, software engineer, or

other similarly skilled worker, whose primary duty is —

Exemptions

(1) any employee employed in a bona fide executivere engineer, or

other similarly skilled worker, whose primary duty is —

(A) the application of systems analysis techniques

and procedures, including consulting with

users, to determine hardware, software, or system

functional specifications;

(B) the design, development, documentation,

analysis, creation, testing, or modification of

computer systems or programs, including prototypes,

based on and related to user or system

design specifications;

(C) the design, documentation, testing, creation,

or modification of computer programs related

to machine operating systems; or

(D) a combination of duties described in

sub-paragraphs (A), (B), and (C) the performance

of which requires the same level of skills, andwho, in the case of an employee who is compensated

on an hourly basis, is compensated at a rate of not

less than $27.63 an hour.


I know this does not help with the overtime issue, but if your DH falls into this exempt category hopefully he comprensated more that the $27.63 /hour listed here.

Wow thanks for this! I don''t believe he falls into the categories that were listed but I''ll look into this a little more to make sure. He''s more of a tech support kind of guy and not really a tech developer like this seems to talk about. I''ll see what they have to say about his position...

 

[oobiecoo]

Okay I read this from that website... I''m not sure if I understand it correctly though. It looks like my husband should be getting his regular salary PLUS 1.5times what his pay/hour works out to be for any hours over 40. Is that correct?


Computing Overtime Pay

Overtime must be paid at a rate of at least one and one-half times the employee''s regular rate of pay for each hour worked in a workweek in excess of the maximum allowable in a given type of employment. Generally, the regular rate includes all payments made by the employer to or on behalf of the employee (except for certain statutory exclusions). The following examples are based on a maximum 40-hour workweek applicable to most covered nonexempt employees.

Hourly rate (regular pay rate for an employee paid by the hour) - If more than 40 hours are worked, at least one and one-half times the regular rate for each hour over 40 is due.
Example: An employee paid $8.00 an hour works 44 hours in a workweek. The employee is entitled to at least one and one-half times $8.00, or $12.00, for each hour over 40. Pay for the week would be $320 for the first 40 hours, plus $48.00 for the four hours of overtime - a total of $368.00.
Piece rate - The regular rate of pay for an employee paid on a piecework basis is obtained by dividing the total weekly earnings by the total number of hours worked in that week. The employee is entitled to an additional one-half times this regular rate for each hour over 40, plus the full piecework earnings.
Example: An employee paid on a piecework basis works 45 hours in a week and earns $405. The regular rate of pay for that week is $405 divided by 45, or $9.00 an hour. In addition to the straight-time pay, the employee is also entitled to $4.50 (half the regular rate) for each hour over 40 - an additional $22.50 for the 5 overtime hours - for a total of $427.50.
Another way to compensate pieceworkers for overtime, if agreed to before the work is performed, is to pay one and one-half times the piece rate for each piece produced during the overtime hours. The piece rate must be the one actually paid during nonovertime hours and must be enough to yield at least the minimum wage per hour.
Salary - The regular rate for an employee paid a salary for a regular or specified number of hours a week is obtained by dividing the salary by the number of hours for which the salary is intended to compensate. The employee is entitled to an additional one-half times this regular rate for each hour over 40, plus the salary.
If, under the employment agreement, a salary sufficient to meet the minimum wage requirement in every workweek is paid as straight time for whatever number of hours are worked in a workweek, the regular rate is obtained by dividing the salary by the number of hours worked each week. To illustrate, suppose an employee''s hours of work vary each week and the agreement with the employer is that the employee will be paid $480 a week for whatever number of hours of work are required. Under this agreement, the regular rate will vary in overtime weeks. If the employee works 50 hours, the regular rate is $9.60 ($480 divided by 50 hours). In addition to the salary, half the regular rate, or $4.80, is due for each of the 10 overtime hours, for a total of $528 for the week. If the employee works 60 hours, the regular rate is $8.00 ($480 divided by 60 hours). In that case, an additional $4.00 is due for each of the 20 overtime hours for a total of $560 for the week.

In no case may the regular rate be less than the minimum wage required by FLSA.

If a salary is paid on other than a weekly basis, the weekly pay must be determined in order to compute the regular rate and overtime pay. If the salary is for a half month, it must be multiplied by 24 and the product divided by 52 weeks to get the weekly equivalent. A monthly salary should be multiplied by 12 and the product divided by 52.

 

[elrohwen]

Oobie, I've never heard of anyone receiving overtime pay when they're on salary, despite what that website says.

 

[jewelerman]

Also have your husband ask about traveling expenses and if he must use his credit card or car for company use and who pays for gas and extra expenses related to a salaried job...my job expects hourly and salaried employees to use their car and gas without reimbersement...this is why i refuse to use my car for company use.

 

[Italiahaircolor]

Date: 3/10/2009 12:54:27 PM
Author: elrohwen
Oobie, I''ve never heard of anyone receiving overtime pay when they''re on salary, despite what that website says.

Ditto. We do not pay overtime to our salary employee, i.e: my assistant...she makes her salary, flat out, regardless of if she''s working a 15 hour work week or traveling with me and putting in 60 hours.

 

[Hudson_Hawk]

Date: 3/10/2009 1:07:58 PM
Author: jewelerman
Also have your husband ask about traveling expenses and if he must use his credit card or car for company use and who pays for gas and extra expenses related to a salaried job...my job expects hourly and salaried employees to use their car and gas without reimbersement...this is why i refuse to use my car for company use.

These expenses, if not refunded in full from your employer, can be deducted from your taxes (if you itemize, that is).

 

[oobiecoo]

Date: 3/10/2009 12:54:27 PM
Author: elrohwen
Oobie, I''ve never heard of anyone receiving overtime pay when they''re on salary, despite what that website says.

That''s what I thought... maybe I''m just not understanding the website completely. He''s compensated for his miles right now and that won''t change. I guess we''ll just have to deal with the ridiculously long hours. He usually works 50-70 hours per week on top of being a grad student... they just need to hire an extra employee!

 

[elrohwen]

Date: 3/10/2009 1:39:22 PM
Author: oobiecoo

Date: 3/10/2009 12:54:27 PM
Author: elrohwen
Oobie, I''ve never heard of anyone receiving overtime pay when they''re on salary, despite what that website says.

That''s what I thought... maybe I''m just not understanding the website completely. He''s compensated for his miles right now and that won''t change. I guess we''ll just have to deal with the ridiculously long hours. He usually works 50-70 hours per week on top of being a grad student... they just need to hire an extra employee!

It really does suck sometimes. FI''s working about 55 hours a week right now and he can''t find any way to do less or get things done faster

I travel a lot and end up working almost 60 hours some weeks. It does suck! One benefit is that you get a free pass to doctor''s appointments and things as long as your work is getting done. That''s something that isn''t so easy with an hourly job.

 

[Hudson_Hawk]

Date: 3/10/2009 1:39:22 PM
Author: oobiecoo

Date: 3/10/2009 12:54:27 PM

Author: elrohwen

Oobie, I''ve never heard of anyone receiving overtime pay when they''re on salary, despite what that website says.

That''s what I thought... maybe I''m just not understanding the website completely. He''s compensated for his miles right now and that won''t change. I guess we''ll just have to deal with the ridiculously long hours. He usually works 50-70 hours per week on top of being a grad student... they just need to hire an extra employee!

I''m sorry, but that''s a whole lot of time to work on salary (and not a Dr''s salary!). Has your FI thought about trying to negotiate a bonus on top of the salary, or more vacation time?

 

[Italiahaircolor]

Date: 3/10/2009 1:39:22 PM
Author: oobiecoo

Date: 3/10/2009 12:54:27 PM
Author: elrohwen
Oobie, I''ve never heard of anyone receiving overtime pay when they''re on salary, despite what that website says.

That''s what I thought... maybe I''m just not understanding the website completely. He''s compensated for his miles right now and that won''t change. I guess we''ll just have to deal with the ridiculously long hours. He usually works 50-70 hours per week on top of being a grad student... they just need to hire an extra employee!

70 hours is a lot of overtime...is there anyway that he could work something out so that anything over 40 hours a week, he works from home exclusively?

For me, I can work 70, 80 hours a week and not even notice...and when I was single, I loved being at the office putting in time, making serious money. But now my quality of life comes first and my DH and I have a rule...anything over 50 hours must be done at home. Mark is salaried and works at home 3 out of 5 days...but I work straight office hours for my main employment and those usually total 50 or more hours per week. So if I''m writing a new cirriculum or whatever, I do it at home. I am not nearly as burned out by weeks end, I still "see" my husband and spend quality time with him--even if its just brainstorming and eatting dinner.

You husband could just approach his boss and let him know that he''s so excited about the turn of events, but was wondering if he could work from home a bit too...so he can have a life/work balance. And truthfully, any boss who works with his family gets the importance of that.

 

[oobiecoo]

Date: 3/10/2009 1:52:17 PM
Author: Hudson_Hawk

Date: 3/10/2009 1:39:22 PM

Author: oobiecoo

Date: 3/10/2009 12:54:27 PM


Author: elrohwen


Oobie, I''ve never heard of anyone receiving overtime pay when they''re on salary, despite what that website says.

That''s what I thought... maybe I''m just not understanding the website completely. He''s compensated for his miles right now and that won''t change. I guess we''ll just have to deal with the ridiculously long hours. He usually works 50-70 hours per week on top of being a grad student... they just need to hire an extra employee!

I''m sorry, but that''s a whole lot of time to work on salary (and not a Dr''s salary!). Has your FI thought about trying to negotiate a bonus on top of the salary, or more vacation time?

Probably no hope of a bonus... and its pointless to get vacation time because he can''t take it. Rarely does he get to take a day off (much less 2 or 3) because his boss needs him there.

Just another year or so more at this job though until we are OUTTA HERE!

 

[Hudson_Hawk]

Have you taken the 50-70 (say 60 average) work week and divided it by his salary (salary divided by 52 divided by 60) to get his new "hourly" pay? How does it compare to his previous hourly pay?


Would the boss allow him to remain hourly? I would turn down the salary offer and ask to remain hourly if possible. It sounds like your guy is being taken for a very LONG ride!

 

[soocool]

I guess the point I am trying to get across is that you can''t just make someone salaried, because you feel like it to save your company ot money. There are laws governing the rights of employees. If you have ever read The Jungle, you''ll understand why these laws are in place.

You may want to contct the state you live in to make sure your DH is compensated fairly and should be considered a non-salaried employee entitled to ot pay.

you can check this final link http://www.dol.gov/esa/whd/regs/compliance/fairpay/fs17e_computer.pdf to get answers to your questions or at least lead you to contact someone who can give you some answers. I was a salaried employee and did earn ot (reg not time & half) during some peak times in which I was required to be there. But my job title fell under that category. We did not just assign salaried and non-salaried titles/positions to people to save $$$. There are rules. Big companies comply because they are closely scrutinized. Such a place where your DH works may not. Regarding hours worked, I know there are rules for young students, but not sure about everyone else. My company had rules/regulations regarding number of ot hours worked so that our employees would not burn out

Do they also withold his taxes and give him a W-2. A friend of mine was smart to hold onto her paystubs, because the company (tiny) did not pay the taxes and her stubs clearly indicated that they did. She was going to be prosecuted for non payment of taxes and this saved her.