FLSA question @hoffse?

lbonga1

Some of you may be aware that changes to FLSA require exempt employees to have a new minimum salary of $47,476 by December 1. I heard about this and realized it affects me because I was hired as an exempt employee with a salary of $45,000. I spoke to my HR manager, and I was told that I am being reclassified to a hourly employee. It is very obvious that they are doing this to avoid an increase in my pay, and I was explicitly told that I would not be allowed overtime unless it was previously approved by my manager.
So here's the thing... I thought that I would need to be considered exempt because my position meets the requirements under the federal computer employees exemption rules. But apparently CA has its own exemption rules which are mostly similar, but also specify that entry-level employees do not need to be exempt. My position is entry-level. So which rules am I supposed to follow?

ETA: The CA exemption rules also specify that computer employees would need to be paid at least $87,185.14 to be considered exempt, but my employer is keeping anyone above a junior-level position as exempt, even though I know many of them are not paid that much. That makes me feel they are picking and choosing what rules they are going to listen to in order to benefit themselves.

bmo88

This whole thing is a bit of a mess and we are going through it at the organization I manage.

I am not familiar with CA rules specifically, but I am currently reclassifying quite a few employees. The basics are in order to be exempt, you must meet both the salary requirement ($47,500) and the qualifications/duties requirement (i.e., type of position that requires specific education/training).

From the basics of the law, it seems that you do not meet the salary requirement and thus should be classified as hourly.

**This is not legal or HR advice, just my understanding on the reclassification process. 

jtmh2012

Personally, I think the whole exempt thing is BS and employers use it to take advantage of people.

LillibetteV

jtmh2012 said:

Personally, I think the whole exempt thing is BS and employers use it to take advantage of people.

My profession (paralegal) cannot generally be classified as exempt and it's one that is specifically called out in the regulations. It caused a bit of hoopla in the community because on the one hand some people thought that being hourly meant our work wasn't "professional" or skilled and were offended. And then the other half remembered how many hours we can end up working (especially those of us in litigation during a trial) and heck yes to mandatory overtime pay! As a paralegal you have a really good base salary to start with and the OT makes it even better. I wish the regulations were more clear on other specific jobs titles. 

bmo88

jtmh2012 said:

Personally, I think the whole exempt thing is BS and employers use it to take advantage of people.

I think some employers unfortunately will take advantage of people. As someone who runs an organization, I can say I personally won't. We are keeping everyone at their established wages/compensation, but have to track hours now.

The intent of the law makes sense, to not exploit lower wage workers who were on salary before by having them work too many hours. The reality is, many corporations will find ways to merely pay people less or undermine the law.

labro

I've seen some benefit in this already. Both my ILs qualify. We don't know if my FIL will get a raise or if he'll become non-exempt yet (he has a salaried role as a department manager), but my MIL has already been informed by her employer that she'll become a non-exempt employee starting on the effective date of the new law.

jtmh2012

bmo88 said:

jtmh2012 said:

Personally, I think the whole exempt thing is BS and employers use it to take advantage of people.

I think some employers unfortunately will take advantage of people. As someone who runs an organization, I can say I personally won't. We are keeping everyone at their established wages/compensation, but have to track hours now.

The intent of the law makes sense, to not exploit lower wage workers who were on salary before by having them work too many hours. The reality is, many corporations will find ways to merely pay people less or undermine the law.

I get the intent, but I'm in IT working for a government contractor.  Not a manager.  But am considered exempt.  Fortunately, my current employer is somewhat good about it at least on the team I'm on, but even here it is slightly abused.  My prior employer regularly had people working 60+ hour weeks to avoid hiring more people as anything over 40 hours was a fixed cost since they didn't pay overtime.

short+sassy

Apparently I have been living under a rock.  So, I am understanding that any exempt employee...in any job/industry...needs to be paid at least $47,476 by Dec. 1st?

Are there exclusions for smaller companies? (Just a curiosity question).

Interesting.  Yes, I can see a lot of people in the near future being "re-classified".

I've been fortunate that, even when I've had salaried jobs, they still pay at least straight time for OT hours.  With one exception.  One of my first jobs out of college was an exempt managerial position.  I was told in the interview there would occasionally be OT, but the normal schedule was 40 hours/week. 

I took the job they offered.  BOLDFACED LIARS.  I have rarely been so disgusted in my life.  I never worked less than 50 hours/week and had a 60 hour/week schedule twice.  I was only making $24K/year!!!  Though that was 20 years ago.  Some of the heavier weeks, I literally would have been better off making minimum wage and getting OT.  I quit in less than 3 months.  I only wish I could have afforded to quit on my very first day when I saw the first schedule.

bmo88

@short+sassy: There are some exceptions to the rule if salary is not met. I am not familiar with all, but I do know that teachers will always be exempt regardless of compensation level. (Kind of a shitty designation, but that's the way it is set up now).

smerka

Does anyone know what is included in that salary?  Is it health insurance too or is that considered a benefit and not compensation?  I was trying to help my mom figure that out last week. 

als1982

I think this new regulation is a very, very good thing.  IMO the new norm of a 50+ hour work week and constant connectivity to the office is very unhealthy for the individual worker, their families and our society in general.  Hopefully this is a small start in helping combat and minimize that.

AprilZ81

Why does government write laws that are so confusing I can't understand what they mean?!?

I had NOT heard about this and I think it might affect my position.  I make less than $47k and am not currently eligible for overtime.

I have a white collar desk job but I'm not sure if it would be classified as "administrative" or not.  I'm not a secretary/admin assistant and I'm not running an office, so maybe not?

I don't normally work a lot of extra hours, but at some points in the year I do work longer hours.  I would love to have a salary increase but somehow I doubt it will happen.  But as long as I get to have overtime paid out I'll be okay with that extra money.

smerka

This might help AprilZ. I've always worked as a 'professional' so I've always been exempt. 
http://www.flsa.com/coverage.html

AprilZ81

smerka said:

This might help AprilZ. I've always worked as a 'professional' so I've always been exempt. 
http://www.flsa.com/coverage.html

I think I'm just more confused.  lol

I work in corporate meeting planning which might be considered administrative, but doesn't fall in into the "keep the business running" category of finance/HR/payroll/etc.

I may reach out to HR to see what they can tell me.

smerka

I would guess they'd call you a professional and therefore exempt from overtime. especially if you make decisions like where to have meetings, what food to have, who to get it from, etc. 

LillibetteV

I thought the definition of "professional" was based on required education to join the field? Doctors, lawyers, CPAs, etc all have specific requirements. That was the reason there was confusion over paralegals' status - there is no specifically defined path. Some have a high school diploma and a paralegal certificate, some an associates degree, and some a bachelors degree. Some with college education also get the certificate, but many do not and instead received on the job training. 

smerka

My field (environmental consulting) does not have education requirements either. Professional engineers, yes. But not consultants. Though most of us work for or with a PE, it is not necessary to do the job. 

bmo88

LillibetteV said:

I thought the definition of "professional" was based on required education to join the field? Doctors, lawyers, CPAs, etc all have specific requirements. That was the reason there was confusion over paralegals' status - there is no specifically defined path. Some have a high school diploma and a paralegal certificate, some an associates degree, and some a bachelors degree. Some with college education also get the certificate, but many do not and instead received on the job training. 

My understanding as well is that a position must require a certain level of specialized education or training to be "professional."

AprilZ81

smerka said:

I would guess they'd call you a professional and therefore exempt from overtime. especially if you make decisions like where to have meetings, what food to have, who to get it from, etc. 

My specific role doesn't do any actual decision making and we don't sign any contracts.  I keep re-reading the rules and it sounds like by "decision making" you are making decisions about BIG things that affect company growth, direction, bottom line etc.  I think they are going to have to give us all a raise or take the risk that we put in more than $5k of overtime in a year.

I sent an email to HR about this today, so we'll see if they ignore me or I get a response.

My very rough calculations would be that I would have to average 2 hours of overtime a week over 50 weeks for it to be cheaper to make me hourly vs give me a raise.  I think this is pretty doable for me if I start actually tracking the times that I don't take a lunch break or work over 30 minutes here and 1 hour there.  During busy season I can easily put in 10 hours extra a week and if I have to travel for a meeting (usually 2-3 times a year) I'm literally putting in 14-15 hour days.  

And I just realized that if I'm re-classified that means I might not get paid if I miss an hour or two of work due to a doctor's appointment.  Right now as a salaried employee I get those hours for "free" as long as I don't miss deadlines and my work still gets done.  Unless I have an appointment during crazy busy season I can usually get all caught up by the end of the day, but I will be upset if I'm now going to have to account for every second of my time.

lbonga1

@smerka health insurance would be counted as a benefit, and therefore not included in the salary requirement. Bonuses can be included in the salary, but it can only be up to a certain percentage; I don't quite remember what the percentage is.
@short+sassy, you are correct in that all exempt employees need to be making at least that amount, or reclassified to hourly and become eligible for overtime. Small companies are not excluded (I work for a small company).

Personally, I think either my company either doesn't know what they're doing, or they're taking advantage (more likely). There's about 8 of us on my team, and all of us make under $87k. We're all software programmers, but 3 of us are "junior" level. If we should be following the CA exemption requirements, which seems like should be the case, none of us should be exempt. But what they're actually doing is making all junior employees hourly based on the CA rule that entry-level employees shouldn't be exempt, but following the federal rule when it comes to keeping all above-junior employees non-exempt because their salaries and duties meet the federal requirements.  

hoffse

Sorry, I've been at a conference with sh*tty internet for the last week.

My understanding is that exempt vs. nonexempt isn't going to change in terms of general job duty definitions - it's just the wage thresholds that are changing, and many employees are going to be reclassified.  This has a good summary of the job duty tests:

https://www.dol.gov/whd/overtime/fs17a_overview.htm

In terms of state vs. federal rules, when there is a direct conflict federal trumps state.  But be aware that often times people think there is a state law conflict when there is not - because there is something in the state law that either concedes to federal law or works in tandem with federal law of which they are unaware.  That being said, conflicts arise most often when the federal law changes and the state law hasn't caught up yet.

Giant caveat here is that I do very little work in this area and only know just enough to be dangerous.  I know the changes go into effect Dec. 1, but otherwise I have not kept up with it very much.