What Salaried Really Means

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I was talking to a person who did graphic design for an architecture firm. She often has to produce work on short deadlines, often working late hours and coming in early.

I wish I was salaried, she told me.

I assumed, like most people, when she said salaried, she meant exempt.

Why? I asked, you’d lose your overtime. You wouldn’t get paid for all those extra hours you work.

Yes, but I’d be salaried.

Like most people, she equated exempt with being a professional. Getting paid for the work performed, rather than the hours worked. To her, it’s a sign of status, like a corner office or a vice president title. And like those things, she was willing to sacrifice pay to get it.

Now the Department of Labor is proposing changes to the Fair Labor Standards Act (FLSA) which will make it harder for you to be classified as exempt. Basically, one of the requirements is that you earn a salary of$23,660 annually. They proposing to at least double this (IT positions, for all you techies out there, follow a different set of rules).

This rule change means a lot of people who are currently exempt will either have to receive pay raises or be reclassified and get overtime. NPR featured just such a person. A bank branch manager getting paid $30,000 a year was told when he was hired that his was not a 9 to 5 job. He would always be on call. As a result, he often works 60 hours per week. Because he’s exempt, he doesn’t make a dime more for it.

I worked this out. At 60 hours per week, he earns the equivalent of just over $9.50 per hour. Some bank tellers earn more than this, and don’t have near the responsibility. For all practical purposes, he is probably earning less than many of the loan officers and personal bankers he supervises.

Low paying industries have been doing this for years. They give someone the title of manager, work the hell out of them, and get to keep all the additional results of that labor as profit. In addition, many of these people aren’t even true managers. Due to their companies’ constant budget cuts, they are short-staffed, so they make up the difference. Most of their time isn’t spent hiring or developing staff. It’s spent working behind the coffee counter or stocking shelves, with less than half of it

Of course, some of these employers complain that if the law changes, they won’t be able to make money, forcing them to cut jobs. They may even have to shut their doors. Good. As I’ve said before, if your business model depends on taking advantage of your workers, you have a poor business model and deserve to go out of business.

Other employers are naturally looking for ways around the law before it even goes into effect. Most will merely move the employees at issue to hourly, but pay them less so that they’ll have to work overtime to maintain their current rate of pay. Then they’ll turn around and say it’s not their greed, but big bad government’s fault.

Nice, huh?

It’s too bad that any of these rules are even necessary. The workplace would be so much better if employers didn’t see employees as a resource, like computers or shelf space, but rather as a stake holder, just like their customers and shareholders, people invested in the success of the organization who employers need to invest in for their success.

Until that time comes, the Department of Labor will continue to enforce the FLSA, and employers will continue to find ways to work around it, or flaunt it all together.

And as long as she’s salaried, that graphic designer and millions like her will be thankful for the privilege of being considered a “professional”.