"Whatever Happened to Overtime?", a piece written by a Job Creator

[MadImmortalMan]

Not having to have the time clock hassle is a benefit.

[Tamas]

Also the common persons most valuable asset is usually real property, which appreciayes with inflation, whilst the debt used to finance its purchase is diminished.

Most common people don't keep reichsmarks in their mattress.

Yeah. I would say that inflation hits not the common people, but the upper middle class/lower upper class the hardest. It is a form of wealth distribution from them to the "common people" (through government spending of the money it prints/public debt it devalues).

We are lucky we have governments to take care of our wealth and redistribute it for us.

[Martinus]

Also the common persons most valuable asset is usually real property, which appreciayes with inflation, whilst the debt used to finance its purchase is diminished.

Most common people don't keep reichsmarks in their mattress.

Yeah. I would say that inflation hits not the common people, but the upper middle class/lower upper class the hardest. It is a form of wealth distribution from them to the "common people" (through government spending of the money it prints/public debt it devalues).

We are lucky we have governments to take care of our wealth and redistribute it for us.

If you keep inflation artifically low (or allow it to go into deflation), you are redistributing wealth from providers of labor to holders of capital - high inflation does the opposite.

It's not about "being lucky". It's a matter of policy (which, incidentally, is about different things mainly, with the redistributory factor being largely a side effect).

[Martinus]

BTW on wealth accumulation, is wealth accumulated due to stocks held rising in value being counted in that? If yes, how big a portion that is? Because that's not "real" wealth.

That is not really true. Sure, you have speculative bubbles now and then (which, by the way, still accumulate significant wealth for speculators who manage to sell at the right time), but at least in theory the difference between the net asset value of a company and the overall capitalisation represents goodwill which may not be tangible, but can still be a substantial representation of wealth (and in fact for a company like Apple or Google is most of their wealth).

Following up a bit more on this point, I think the "stocks are not 'real' wealth" point is really naive. The wealth they represent is that of a fair market value of the company. Sure, it can be volatile and is suspectible to bubbles, but other than the risk involved how is it different from the wealth represented by commodities, land, buildings or even hard cash? After all, all of them can have their fair market value increase or decrease rapidly over short periods of time - anyone who owned large stockpiles of oil at the beginning of 2014, or had large investments in residential real estate in 2008 can attest that can be as volatile as stocks. And money is subject to inflation or depreciation against foreign currencies just as well.

In fact, I would say that an increase of a price of shares in a company that does well, makes profits and benefits from the labour of its employees represents a wealth accumulation that is much more "real" than an increase of a price of an undeveloped land simply in response to a market bubble.

[Sheilbh]

If you keep inflation artifically low (or allow it to go into deflation), you are redistributing wealth from providers of labor to holders of capital - high inflation does the opposite.

And between generations which, as a generational jihadi, isn't always a bad thing.

[Martinus]

If you keep inflation artifically low (or allow it to go into deflation), you are redistributing wealth from providers of labor to holders of capital - high inflation does the opposite.

And between generations which, as a generational jihadi, isn't always a bad thing.

I agree. From the overall point of view, it is much better to have a society where people want to get rich from what they accomplish than from what they inherit.

[garbon]

See why I didn't want to go into detail?  OvB still didn't touch on all the twists and turns of this stuff.

It still doesn't explain why you decided to shorthand to something that wasn't even remotely true.

[Caliga]

What's the benefit of being exempt?

I can come and go as I please and nobody gives a shit.  Of course, the flip side to that benefit is tons of off-hours work, so I'm not sure how much of a benefit it really is.

[crazy canuck]

Exactly.  I am not sure what that has to do with a statutory limit on hours worked in a day before overtime is earned.

I understand why certain types of employees should be exempted from overtime requirements.  But disentitlement to overtime simply by the method used to calculate pay seems arbitrary.  To use an example, all our secretarial staff are paid salaries.  But if they work more than the statutory limit on any given day they also earn overtime.  That just seems fair.

That would be nice. My lifetime income would be significantly higher today if ours worked like that. 

The technical term for salaried employees is "exempt". Meaning exempt from overtime rules.

Yeah, but what I am trying to understand is why an employer can exempt an employee simply by using the magic word "salary".    As I said before, it makes a great deal of sense to exempt employees based on their function.  But simply allowing an employer to waive a magic wand and pronounce an employee "salaried" and therefore not entitled to overtime makes no sense.

[garbon]

Exactly.  I am not sure what that has to do with a statutory limit on hours worked in a day before overtime is earned.

I understand why certain types of employees should be exempted from overtime requirements.  But disentitlement to overtime simply by the method used to calculate pay seems arbitrary.  To use an example, all our secretarial staff are paid salaries.  But if they work more than the statutory limit on any given day they also earn overtime.  That just seems fair.

That would be nice. My lifetime income would be significantly higher today if ours worked like that. 

The technical term for salaried employees is "exempt". Meaning exempt from overtime rules.

Yeah, but what I am trying to understand is why an employer can exempt an employee simply by using the magic word "salary".    As I said before, it makes a great deal of sense to exempt employees based on their function.  But simply allowing an employer to waive a magic wand and pronounce an employee "salaried" and therefore not entitled to overtime makes no sense.

Well as OvB noted, yeah that likely makes no sense as that isn't what the regulations are.

[Tamas]

If you keep inflation artifically low (or allow it to go into deflation), you are redistributing wealth from providers of labor to holders of capital - high inflation does the opposite.

And between generations which, as a generational jihadi, isn't always a bad thing.

I agree. From the overall point of view, it is much better to have a society where people want to get rich from what they accomplish than from what they inherit.

Progressive income tax disagrees with you. 

[crazy canuck]

Exactly.  I am not sure what that has to do with a statutory limit on hours worked in a day before overtime is earned.

I understand why certain types of employees should be exempted from overtime requirements.  But disentitlement to overtime simply by the method used to calculate pay seems arbitrary.  To use an example, all our secretarial staff are paid salaries.  But if they work more than the statutory limit on any given day they also earn overtime.  That just seems fair.

It's not actually based on how you're paid, but people here tend to be stupid.

There's two basic ways you can be paid as far as the Fair Labor Standards Act is concerned: Hourly, or Salary. Hourly employees must be paid an agreed rate for every hour worked, there is a Federal minimum wage for this rate (tipped employees paid a reduced minimum), and they must be paid 1.5x that rate for every hour worked over 40 hours. There is no overtime for going over x number of hours per day, a lot of people choose to work four 10 hour days instead of five 8s, or their employers choose for them.

Within the salaried classification, there are two further classifications: exempt and non-exempt. If you are a non-exempt salaried employee, you must be paid overtime for hours worked over 40 per week. If you are exempt, you do not have to be paid overtime. However, to be classified as exempt requires two things:

1. Income over the $23k threshold
2. Performance of exempt job duties - this is a vaguely defined "high level duties", usually recognized as some form of managerial duty.

Ah ok, I thought what the other posters had said didnt make sense.  This does and it is roughly how we do it.  Except that for non exempt employees we have limits for both daily and weekly hours.

Thanks.

[garbon]

http://jobs.aol.com/articles/2011/07/18/salaried-workers-do-you-get-paid-for-overtime-odds-are-you-sho/

Specific jobs excluded: movie theater employees, live-in domestic employees, farmworkers on small farms, railroad employees (you're covered by the Railway Labor Act) and truck drivers, loaders, helpers and mechanics (covered under the Motor Carriers Act), computer professionals making at least $27.63/hour, commissioned sales employees who average at least 1.5 times minimum wage/hour, auto dealer salespeople, mechanics and parts-people, and seasonal and recreational workers. There are others who are exempt from all or part of the Fair Labor Standards Act, listed here.

Salaried employees: If you make less than $23,600 ($455/week) you're never exempt. If your employer cuts your pay if you miss part of the work day, you're not exempt. But they can deduct paid time off from your leave bank or PTO if you miss work. You can't have your salary reduced if there is no work or if work is slow. You can be docked for missed full days due to disciplinary suspension, sick days, or personal leave. But even if you're salaried, you're still not exempt from overtime unless you also have exempt job duties.

Executive duties: If you're salaried and they don't take improper deductions, then you're exempt if you supervise two or more employees, if management is your primary job, and if you have genuine input into the hiring, promotion and firing of your subordinates.

Learned professions: This exemption includes doctors, lawyers (not paralegals), dentists, teachers, architects, clergy, RNs (not LPNs), engineers, actuaries, scientists (not technicians), pharmacists, and other learned professions (usually requires an advanced degree).

Creative employees: Creative employees who are exempt include actors, musicians, composers, writers, cartoonists, and some journalists. People in this category don't necessarily have to be paid on a salary basis to be exempt.

Administrative duties: If you perform office or non-manual work that's directly related to management or the general business operations of your company or their customers, and you are regularly required to use your independent judgment and discretion about significant matters, then you might be exempt. An administrative assistant who is the CEO's right hand is probably exempt, but the secretary to a mid-level manager probably isn't.

[Martinus]

Exactly.  I am not sure what that has to do with a statutory limit on hours worked in a day before overtime is earned.

I understand why certain types of employees should be exempted from overtime requirements.  But disentitlement to overtime simply by the method used to calculate pay seems arbitrary.  To use an example, all our secretarial staff are paid salaries.  But if they work more than the statutory limit on any given day they also earn overtime.  That just seems fair.

That would be nice. My lifetime income would be significantly higher today if ours worked like that. 

The technical term for salaried employees is "exempt". Meaning exempt from overtime rules.

Yeah, but what I am trying to understand is why an employer can exempt an employee simply by using the magic word "salary".    As I said before, it makes a great deal of sense to exempt employees based on their function.  But simply allowing an employer to waive a magic wand and pronounce an employee "salaried" and therefore not entitled to overtime makes no sense.

I think the point they are making is that in many jobs there is enough gray area so that it is feasible to qualify a job as one that either does or does not benefit from overtime regulations, depending on creative interpretation.

In Poland you have a relatively similar situation. You can work as an employee - in which case you are subject to a higher tax, pay higher social security, but enjoy better job protections (including overtime) - or you can work as an independent contractor - in which case you pay a flat tax, much smaller social security but do not enjoy job protections.

Technically, from the legal perspective, these two are mutually exclusive and, based on the nature of your duties, you can be either an employee or a consultant, but not both. For example (and I am oversimplifying this for the sake of argument), an employee is someone who works "from 9 to 5", has a specific scope of duties, works under supervision etc., whereas a consultant is someone who does not have set hours of work, is more independent etc.

In practice, there are many jobs (for example, lawyers) that can be easily qualified as either depending on how you draft their contract. For example, I work as an independent contractor, but a colleague three rooms from me is an employee, and our duties are pretty much identical (I prefer more flexibility because it allows me to pay a 19% flat tax; she may consider getting pregnant in near future, so she prefers an employee status, even though she earns less net as a result).

I suspect, all local differences aside, a situation in the US may be similar.

[Baron von Schtinkenbutt]

I'm still confused as to the difference between a full-time hourly employee and a non-exempt salaried employee.