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Feds' Tips On Avoiding OT Pay

post #1 of 24
Thread Starter 
MORE WORK FOR SAME PAY?
The Labor Department is suggesting ways employers can avoid paying overtime to newly eligible workers in its proposal.

It offered this example of a "payroll adjustment":

A worker earning $400 per week for 40 hours becomes eligible for overtime pay, which would average five hours a week.

The employer can convert the worker to an hourly pay rate. But instead of paying him $10 an hour plus overtime, the employer can cut the worker's pay to $8.42 an hour, or $336.80, for a 40-hour week.

The five hours of overtime pay at time-and-a-half — totaling $63.15 — gets added to the reduced pay.

The new pay with overtime equals $399.95 per week, compared to the old salary of $400 per week with no overtime.

This "payroll adjustment option ... could offset the impact of the proposed rule," the department said.

(Source: DOL, AP)


More information from main article:
Feds' Tips On Avoiding OT Pay

According to the article, anyone earning over 22,100 annually would now be ineligible for OT - that's $10.62/hour. Guess it's time for working folks to say goodbye to whatever family time you may have left after all the layoffs. Why pay for payroll taxes and benefits for two employees when you can lay one off and work the remaining employee 80 hours a week without any additional overtime expense? Just work the one until he or she is burnt out or injured, then hire another. Voila! Disposable workers.

post #2 of 24
Well, in reading the article, the current law was enacted in 1938 Fair Labor Standards Act and the current threashold is $8,060. So, obviously most employers aren't going by the current threashold. Thank goodness none of my employers have!

Honestly, I don't understand the new law that is proposed. I don't understand the old law for that matter. What I do understand is that the media sure isn't giving this a full explanation, just picking up what they want to hear. Apparently, this law would affect many low-income employees who are not getting overtime pay currently. Why the Labor Department is "suggesting" these ways to get around it is honestly beyond me, though.
post #3 of 24
That is freaken NUTS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! I know me and rich depend on over time money to make ends meet!
post #4 of 24
I am just fuming...nooo...FUMING AND FURIOUS over the new proposals for payment of overtime pay. I am wondering why doesn't anybody seem to care about this issue? I have brought it up at work, and only one other nurse seems concerned about it. My husband has been trying to get his co-workers interested in this, too. He says the same thing...they either think it can't happen to them, or they think it won't happen at all.

What are the opinions of everyone here on the board about the new proposals? Will it affect you? your families? How do your friends/co-workers feel about it? Is there anything anybody can to to keep this proposal from taking place in March?

Here is the site I have been finding some information on that I thought I would share with you:

http://www.saveovertimepay.org/

I am really really curious as to what everyone's opinions are, as I just don't think the media, the presidential candidates, or anyone is really giving this the attention that it deserves. I am afraid that America's working class that depend on overtime to pay their bills is in for a very rude awakening.

Cindy W.
post #5 of 24
Thread Starter 
I fear for workers, as these provisions will make many people who have been earning overtime ineligible. And our labor department is freely dispensing advice on how to avoid OT costs for those who are newly eligible, too! So much for the pretense of passing these changes to help lower-income workers.

I fear an increase in forced overtime b/c there will no longer be any financial disincentive to prevent employers from working people longer hours. I fear resulting layoffs, as employers can work fewer employees longer hours, thus avoiding payroll taxes and benefit costs associated with having more employees. I fear an associated increase in debilitating repetitive strain injuries as workers work longer hours, with less time for their bodies to recuperate from strain.

I have already written my Representatives and Senators about this, and will sign the petition as well. I strongly urge anyone who opposes this to contact your representatives and let them know what you think. The website listed above by Cindy W. has links to the main AFL-CIO website, which has links to contact your representatives.

*What makes this even more disgusting to me is that this is coming from an administration that espouses "family values". Families need time together to teach their children family values...but they don't seem to think that's important.
post #6 of 24
I don't know if it will do any good, but, I also wrote to my representatives/senators and urge others to do the same.

Cindy W.
post #7 of 24
I asked our accountant about this, since I figured she would be the most well versed person that I know about matters like this.

While she wasn't familiar with this particular proposed regulation - none of her resources (CPA, lawyers, etc.) had sent her any notices on it - she did let me know how the whole issue could affect private sector employers. Basically, it doesn't really. It will be mandatory for government agencies to follow the new guidelines, and probably for union employers to do the same (she wasn't sure about that). These regulations are guidelines that the government suggests that private sector employers follow, but they are not obligated to. In fact, most private sector employers offer way more than the guidelines currently suggest because they have to compete for their workers and the only way to do that is to offer a competitive compensation package.

I know that my company doesn't follow the current guidelines, they offer much more than the guidelines say they have to. If I am reading this correctly, the current threashold over which an employer is not obligated to pay OT is $8,060 per year (based on 1938 regulation that has never been updated). That being the case, I haven't qualified for that since I worked part time in college, but yet I have gotten OT at the majority of my jobs. I would guess most of the engineers make more than the $65,000 proposed cap, and they will not have their OT cut out because of it - because the owners of the company make that determination, not just the regulation.
post #8 of 24
I don't understand how that could be legal. I mean when you get hired for a job, it is in your hiring agreement on how much you get paid. How can the employer lower the "hourly wage" if the person was hired on salary of $10 an hour or $400 a week?

I guess I am wondering how employers could get away with conversions of salaries. If that were possible, wouldn't all employers be doing this and who's to say it would only be cut to $8 something. What's to stop an employer from saying " heck I just changed his pay from $10 to $8.80, why not go lower and cut it to $5 plus overtime?

This makes no sense to me at all.
post #9 of 24
Ummm. Sorry to bring up such an old thread, but I was searching for Overtime Pay.

My boss doesn't pay us workers any overtime. He said that we have three options:

1. Get paid what we are currently making
2. He will pay us minimum wage, and then we will get paid for overtime.. which doesn't add up right to me!
3. Don't work over 40 hours

So, I brought this whole topic up to him. We discussed my overtime pay, and we decided that I would get a raise.... from $10/hour to $12/hour and now I'm the Office Manager. He gave me a big speach on how he doesn't have to pay me overtime, so I just ignored it since I really need the money.

Then, we hired a new girl and she just got her first pay check. She came up to me and asked about overtime. Oh gosh. Ummm, no there's no overtime! She asked the boss about overtime. He said that he'll make sure she doesn't go over 40 hours anymore- she was working like 60 a week. (I'm working at least 50, this week I worked like 70?)

So, what do you guys think. Do we by law, have to get paid overtime? We already brought it up to him, and I don't think he's going to pay it! I don't want to lose my job over this, I just got Office Manager!
post #10 of 24
Quote:
Originally Posted by mybabyphx View Post
So, what do you guys think. Do we by law, have to get paid overtime? We already brought it up to him, and I don't think he's going to pay it! I don't want to lose my job over this, I just got Office Manager!
Well, I'm not sure about this.. it sort of depends on what your state laws are, and what federal law is.. and I'm not sure enough to say positively what federal law is on this particular subject. Check into it, though, because as a supervisor or higher up than her, you can be held liable and if there's ever a court case you could be brought in. I don't know if they can actually hold you accountable, but this is something that would reflect badly on you should it happen. There's probably a wage and hour agency somewhere in your area that can give you a better idea of what your obligations v. your rights/responsibilities as a manager, and the responsibilities of the company. I *think* that currently it's illegal to reduce your wage to avoid paying you overtime, but that's apparently subject to change .. but again, this may depend from state to state, and then modified by the federal laws.

It's really difficult to tell. I am fairly certain that it's illegal to have you work and not pay you for it... but again, don't quote me.

Overall this new legislation is pretty crappy, and reinforces why I think that unions do some good for the worker... so companies can't take advantage of the common joe. I'm not pro-union for companies that respect and treat their workers properly, and fairly, but I'm definitely pro union for companies that will take advantage of everything they can to avoid paying their employees what they deserve. And the sad part of it is, I really wish that unions weren't needed because then it would mean that these people weren't trying to just put the boot to their fellow man.
post #11 of 24
Wasn't Walmart in some hot water recently for making their employees work off the clock so they didn't have to pay overtime? I don't recall the exact details. How did this particular controversy about the proposed new law ever turn out? Overtime hasn't been an issue for me since my summer job in college. All the rest of my jobs have been salary. In a salaried job, you work however many hours it takes until the job is done and you get paid the same whether that took 40 hours or 60 hours.
post #12 of 24
Quote:
Originally Posted by CatsAreBetter View Post
It's really difficult to tell. I am fairly certain that it's illegal to have you work and not pay you for it... but again, don't quote me.
That's not necessarily true.

Salaried employees are generally expected to work overtime hours, but not given additional pay for those hours. The companies figure that as salaried employees (generally) get more benefits than hourly (hourly more likely to be part time or unskilled workers), such as health coverage, retirement program, etc. A lot of it has to do with how your salary was negotiated to begin with, and also with how large of a company you work for. Small businesses (less than 50 employees total) are exempt from many labor laws in order to make it easier for small business to stay in business (I think that goes back to family run businesses who had family working, voluntarily, many hours for not much by way of hourly wages).
post #13 of 24
Yes, but if you're salaried or as we call it here, exempt, you're paid for your weekly or I guess you could say annual hours, regardless of whether that works out to 20 hours a week or 60 hours a week (although a lot of employers want to pay you for only 40 hours or more and get into trouble when they want to *cut* your income for when you work less than 40 hours a week or whatever your normal hours are considered).

OT only applies to hourly normally.
post #14 of 24
That's an old article.

Go to this link and read the "Amendments".

http://en.wikipedia.org/wiki/Fair_Labor_Standards_Act

It sounds like a bunch of double talk, but it doesn't sound as bad as what you have listed in the initial post here.
post #15 of 24
Here there are laws stating they can not cut your hourly wage to make OT the same as your regular hourly wage.

As far as salaried jobs, I have had some that do pay OT based on a 40 hour week and some that don't, I guess it just depends on the employer
post #16 of 24
AZ law mandates time-and-a-half or comp time, for overtime:

http://www.azleg.state.az.us/FormatD...23&DocType=ARS

My company is so desperate for help, that unlimited OT is offered, on a weekly basis. Some companies pay double time, for holidays (NOT mandatory) - mine gives 12 hours of PTO, for working on holidays.
post #17 of 24
When I had office job we had OT once in a while but then corporate office said no more OT so when we worked over 40 hrs we got comp time. But I never thought the comp time was fair. If I worked OT 4 hours only 4 hrs comp time I thought it should have been at time and a half so 6 hours but that never happened. Then the worse part is we couldn't choose as when we could use compy time like leaving early-most times we got to come in later-what good was that????
Anyhow I'm glad I don't have to mess with that stuff any more!!
post #18 of 24
Quote:
Originally Posted by katl8e View Post
AZ law mandates time-and-a-half or comp time, for overtime:

http://www.azleg.state.az.us/FormatD...23&DocType=ARS

My company is so desperate for help, that unlimited OT is offered, on a weekly basis. Some companies pay double time, for holidays (NOT mandatory) - mine gives 12 hours of PTO, for working on holidays.
You know I really thought that is was mandatory, but my boss seems to argue it. I have even printed off papers from the internet proving that it's illegal to not pay OT. That's why I figured that I was the one in the wrong... I'm just an employee- whereas he's an employer!

We are a very small business, 2 owners, 2 receptionists, 1 office manager/receptionist (ME), and then all of our technicians are considered sub-contractors.

I don't get any extra benefits, no PTO, no extra money for working holidays.... but any day I want off- I get off... not paid of course.

When I put my 2 weeks in to quit, (like a couple months ago) they begged me to stay. In order for me to stay they gave me a raise from $10 per hour to $12 right off the bat. That's when they told me I was Office Manager. Still no OT though.
post #19 of 24
Quote:
Originally Posted by mybabyphx View Post
You know I really thought that is was mandatory, but my boss seems to argue it. I have even printed off papers from the internet proving that it's illegal to not pay OT. That's why I figured that I was the one in the wrong... I'm just an employee- whereas he's an employer!
I checked at work for you as the link above seemed only to be for government workers.

Quote:
This quote was taken from the Arizona Division of Labor / Industrial Commission

Arizona does have a minimum wage, but not an overtime law. If the employer is covered by the Fair Labor Standards Act, the federal overtime laws apply. For information on the Federal overtime laws, contact the Federal Wage and Hour Division at www.wagehour.dol.gov.

Arizona's minimum wage went into effective January 1, 2007. The minimum wage is $6.75 per hour. Every employer covered under the Act is required to pay each employee wages not less than this amount.
I know up here, many laws only apply to companies of 50 or more people you would have to contact someone local to find out if your company is covered by the Act.

You local legislator should be able to tell you definitively if you should get overtime or not under the acts.
post #20 of 24
I am amazed at how many people seem to be being unfairly paid / treated in their workplace, and how there are so many employers out there (seemingly also with government sanction) who are allowed to treat their employees so badly.

In my last job I thought I was underpaid but I have learnt so much since then because our government has introduced an industrial relations package that essentially has stopped people from getting any of their benefits, overtime, sick leave etc. It's a huge political issue in Australia at the moment.

I negotiated my last salary and I'm happy with it. I'm a PA and I'm on a salary so I don't get paid overtime. But if I did any overtime it would only be a couple of hours a week. Also, if I ever have to go in on the weekend my boss will pay me. Sick leave, holiday pay etc are all included. This is pretty mandatory for a full time employee.

But I'm only just realising now how lucky I am. I feel so sad that there are so many out there who are earning peanuts and having even that jeopardised by greedy employers
post #21 of 24
Quote:
Originally Posted by KitEKats4Eva! View Post
I am amazed at how many people seem to be being unfairly paid / treated in their workplace, and how there are so many employers out there (seemingly also with government sanction) who are allowed to treat their employees so badly.

In my last job I thought I was underpaid but I have learnt so much since then because our government has introduced an industrial relations package that essentially has stopped people from getting any of their benefits, overtime, sick leave etc. It's a huge political issue in Australia at the moment.

I negotiated my last salary and I'm happy with it. I'm a PA and I'm on a salary so I don't get paid overtime. But if I did any overtime it would only be a couple of hours a week. Also, if I ever have to go in on the weekend my boss will pay me. Sick leave, holiday pay etc are all included. This is pretty mandatory for a full time employee.

But I'm only just realising now how lucky I am. I feel so sad that there are so many out there who are earning peanuts and having even that jeopardised by greedy employers


How do I get your job?
post #22 of 24
Quote:
Originally Posted by mybabyphx View Post
How do I get your job?
Heh, the way to do that is get a job at a union local/headquarters or a major dc based law firm.

I can't complain about my benefits. Mostly, they're very employee oriented. Of course, you still have some of the same crapola that you have other places, but at least I never have to worry about benefits.
post #23 of 24
I work for our local city gov't as the veterinarian technician for our local animal shelter. They have completly screwed me over and have not given me my promised full time hours/raise - and as a result have messed me out of my benifits/insurance. It's infuriating how they just screw people over! I am being kept out of all my benifits/etc by a measily 8 darn hours! Gov't sucks!

Even when I work overtime- i get straight pay. Oh yea- did i mention i get stuck working every single holiday I LOVE my coworkers- i love what line of work i'm in- but i hate how the city treats its employees!
post #24 of 24
Quote:
Originally Posted by CatsAreBetter View Post
Heh, the way to do that is get a job at a union local/headquarters or a major dc based law firm.
Lol! I have no idea what things are like in the States but here jobs like mine are pretty common. Sort of middle-management administration I guess would be the category.

For my kind of position, the wage ranges from $19 to $27 per hour, with superannuation (mandatory saving for retirement) at 9% of that (the employer has to pay this) and you get sick leave, holiday leave (four weeks a year), carer's/bereavement leave and overtime (but only if this is written in to your individual contract). Other extras can be added into your contract for various reasons.

For example, I am on $24 per hour but I also get a 30% commission when we hire out one of our rehabilitation machines (which could be up to $4,000 tax-free per year) plus I also get a $1,000 Christmas bonus which is tax-fee. This is not standard but something I have negotiated with my boss over the time I've been here. In my last review I also asked for a laptop, which he agreed to. It's easier in a sense to do this because it's just him, me and the secretary. He's not responsible for paying a lot of people.

I'm very lucky - and it hasn't always been like this for me - but still, this is pretty standard in my type of work and in my industry, which is medicine. My girlfriend who does the same type of work as me is on a much better salary and benefits as she works for our state government.

Still, it's not a lot of money where I live. Perth is the most expensive city in the world for real estate and also has a very expensive standard of living. It takes a fair bit just to get by here - and there are many, many people MUCH worse off than I am. It's really sad. Our government has created a HUGE divide between rich and poor, and the middle classes are now starting to suffer, too.
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