are you ready for the new overtime law?

by Alison Green on October 31, 2016

Note: The new law discussed in this post was blocked the day before it was set to go into effect.

One month from tomorrow, on December 1, a major change to U.S. overtime laws will go into effect – and might result in changes in your paycheck and your work schedule. Here are answers to some common questions about it.

What exactly is changing?

Starting on December 1, if you earn less than $47,476 annually, your employer will be legally required to pay you overtime (time and a half) when you work over 40 hours in a week.

To understand the change, you need to know that the federal government divides all workers into two categories: exempt workers, who are not required to receive overtime pay, and nonexempt workers, who must receive overtime pay. The exempt category is reserved for employees who perform relatively high-level executive or professional work, outside sales employees, and a few other narrowly defined categories. Currently, you need to earn at least $23,660 a year to be considered exempt – but the new law is raising that to $47,476.

In other words, if you don’t earn at least $47,476, then starting on December 1 your employer very likely will owe you overtime pay whenever you work over 40 hours in a week. (That’s “very likely” rather than “definitely” because there are some narrow exceptions to the law. For example, it excludes doctors, lawyers, and teachers, regardless of what salary they earn. But the vast majority of American workers are covered.)

How are employers likely to handle this in practice?

Well, your employer might decide to raise your salary to the new threshold of $47,476 in order to avoid having to pay you overtime. This is the most likely option for people who work a lot of overtime or who are already very close to the new salary threshold.

Or, your employer might prohibit you from working over 40 hours in a week or require you to get advance approval for any overtime. Your employer might even reduce your base hourly wage in order to account for the overtime pay you’ll receive, thus keeping your overall annual compensation the same.

You might be required to start tracking your time in a way you didn’t have to before. It’s possible that some employers may change the amount of flexibility they offer. For example, if you’re currently able to work 35 hours this week when work is slow and work 50 hours next week when demands are higher, you may not be allowed to do that anymore, since your employer will have to pay overtime for those extra 10 hours the second week.

If I don’t meet the new salary threshold, can I remain salaried or will I have to switch to hourly?

It’s up to your employer, but one option is to make you “salaried non-exempt” – meaning that you get paid the same regular salary from week to week, but you get overtime on top of it during weeks where you work more than 40 hours.

Currently I get comp time when I work overtime. Will that remain an option?

If you’re in the group of people who must be paid overtime, you can only be paid in comp time if you use the comp time during the same work week. For example, if you normally work eight hours a day but on Monday you ended up working two extra hours, your employer could give you two hours of comp time to use before the end of the week – thus keeping your total hours for the week from going over 40.

But you can’t bank comp time to use in a different week, because the law requires that you be paid – in money, not banked time – for all hours over 40 that you work in any given week.

Are there exceptions in the law for small employers or nonprofit organizations?

Small employers are not exempt from the law.

Nonprofits as organizations are covered by this law if they have at least $500,000 per year in business revenue. However, even if your organization isn’t covered under that provision, individual employeesat nonprofits are covered under the law if they engage in interstate commerce in the course of their work, which includes making out-of-state phone calls, receiving or sending interstate mail or email, and ordering or receiving goods from an out-of-state supplier. As a result, the new law will affect most nonprofit employees.

How can I find out how my employer will be handling this for my job?

If you haven’t yet heard anything from your employer about how they will be handling this, it’s reasonable to ask!

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{ 173 comments }

{ 173 comments… read them below }

  1. KarenD*

    I know the House voted in December to delay this rule. Is there any chance the Senate will?

    Generally speaking I like the goals of the law (and except for one department my company was already compliant) but from what we’re hearing locally it’s going to throw a lot of small businesses into the deep end and no, people are not ready.

    1. fposte*

      The Senate introduced the bill and it’s been referred to committee.

      What I’m seeing a lot of is businesses paying formerly exempt employees as salaried non-exempt with a regularized OT expectation and a wage that, when straight time is added to the regularized OT, is the same as they had before. Which is a lot of running to stay in the same place, but you obviously can’t do that with people below a certain level of pay or else you’ll run afoul of minimum wage laws, so the most poorly paid people will get some help from the law.

      1. Retail HR Guy*

        It also forces more truth in advertising under the threshold. No more changing jobs for a pay increase only to find out that you now make less per hour at the new place due to an expectation of 15 hours of unpaid overtime each week.

    2. Pwyll*

      The Senate won’t be back in session until the 14th, and they’re out of session the following week again. It’s certainly possible they could take it up, but I think the Senate will be focused on other matters after the election (I imagine they will push on the Supreme Court and the Budget in different ways depending on who wins).

      And Obama has warned that he would veto any bill to delay. I’m not entirely sure whether they’d have the votes to override.

      And I agree with you that people aren’t ready: I really wish they had phased the change in over a few years.

      1. neverjaunty*

        I keep seeing this ‘people aren’t ready’, but it’s not as though the rule was passed with no notice and only a week ago. It should absolutely not take employers a few years to figure out how to comply with this law.

        1. fposte*

          Wasn’t it first on the radar in summer 2015? Maybe they’ve been waiting for engraved invitations.

    3. Ask a Manager* Post author

      It’s highly unlikely. The Senate is unlikely to have the votes to override the veto that Obama has said he’d give if they tried to delay it, even if they did pass it in the short amount of time that will remain post-election. Assume this is going into effect in one month.

  2. Fluke Skywalker*

    I finally got an answer about my workplace… Sort of. Someone who reports to the operations VP asked, and told me that we’re all getting converted to hourly. Which I am not sure actually adheres to the law because there are definitely people who perform those executive functions included in the conversion. Our operations VP was actually adamant that the kaw doesn’t apply to us because we’re a nonprofit, but once the other employee told them about the revenue & interstate thing, he backed down. However, there still hasn’t been anything said to the staff as a whole! Like… Are the just going to spring it on us at the last minute? (probably) On top of all that, I just got a new boss after 6 weeks without one, and they don’t even know what my job is, so I don’t feel like I can go to them and ask about this… Augh. I freaking relocated 600 miles for this job and am realizing that there’s some bad stuff going on behind the scenes. I’ve been here for just a few months, and a third of the staff has turned over in that time. So. Yeah.

    2. TL -*

      Anyone can be hourly, so that at least is legal. It’s never illegal to pay someone overtime or to track their hours.

      And you should talk to new boss! Just to clarify (even if they don’t know what your job is, it sounds like it would be a good opportunity to sit down with them and say “this is what I accomplish in 40 hrs/wk; this is what I will be giving up by not working overtime”)

      1. Fluke Skywalker*

        I talked to New Boss before their first day of work and prepared a detailed doc with my duties, etc (that they asked me to prepare). Still… She hasn’t talked to me today, but has spent a lot of time with my coworker who she also supervises. Her expertise is not related to what I do at all, so… I’m nervous. And skeptical of this working out for many, many other reasons that would take up a lot of space to write out.

    3. Abigail*

      There are no restrictions on who can be non-exempt–anyone can be no matter what their job function. There are restrictions on who can be exempt. At least that is how I understand it.

        1. Fluke Skywalker*

          For some reason I had it in my head that if your duties qualified you to be exempt, you *couldn’t* be changed to hourly. Don’t know where I got that from, though.

          1. Ony*

            My mental model of this (and someone correct me if I’m wrong) is that you *would* be “exempt” (from the overtime laws – you can’t change that part) but can be treated above and beyond what’s required.

    4. Karo*

      I think an employer can make anyone hourly or salary non-exempt if they’d like to, including executives, it’s just that they are required to for people who make less than a certain amount, and without the requirement it probably doesn’t behoove them to do it.

      1. Joseph*

        “without the requirement it probably doesn’t behoove them to do it.” [make employees non-exempt]
        Correct. In fact, this is the exact reason the rule was changed: Companies were stretching the “exempt” classification ridiculously to avoid paying overtime. So it became common for restaurant managers or hotel managers or other low-paying jobs to be listed as exempt, despite companies working them 60-80 hours per week.

    5. animaniactoo*

      Executive functions is a requirement of being eligible to be non-exempt, but it’s not the only requirement, and it’s only an eligibility determining factor, not a mandated must pay as if meets that criteria.

    6. Gaia*

      You can be classified as non-exempt even if your duties and pay qualify you as exempt. You cannot, however, be classified as exempt if your duties and pay do not qualify you for exempt.

      1. Fluke Skywalker*

        Ah, okay. I guess I was thinking it went both ways, so an exec couldn’t be hourly. But I guess that doesn’t make much sense.

    7. NJ Anon*

      I’ll never understand why people think labor laws don’t apply to nonprofits. I work at a nonprofit and told her this. She still, in a meeting, asked an HR rep whether rules were different. I was so embarrassed, and, of course, he backed me up.

  3. TL -*

    I talked to my managers (who didn’t know what’s going on), tried to set up a meeting with the big boss (got deflected by his admin assist, who referred me to the financial manager, who said she would be happy to talk to me but this was my managers’ call and I needed to talk to them), emailed big boss, who emailed financial manager, who responded saying she had no idea what was going on and they were waiting for word from HR (but took big boss out of the loop on that one).

    This is a very head-meets-desk situation…I’m not happy about this. I don’t really have a choice about working overtime without severely compromising my work, so we do need an answer soon.

    1. Ask a Manager* Post author

      If that’s the case, start logging your hours as of December 1. If they ultimately determine you’re non-exempt, they’re legally required to pay overtime, even if it’s in back pay at that point.

      1. TL -*

        I’m under the salary threshold so at Dec. 1st, I will be non-exempt. My company is good, just apparently disorganized. And I won’t get punished for pushing back on the law (awesome managers!)- I just don’t want to have to to throw away work because we run out of time.

  4. Abigail*

    What about comp time for hours more than your regular week but less than 40?

    At my organization, the standard full-time work week is 35 hours (9-5 with an hour unpaid lunch is standard, but we are allowed some flexibility usually). It has been standard to give comp time instead of overtime pay for non-exempt employees, mostly due to attendance at conferences or special events.

    If I work 38 hours for six weeks straight, is it allowed that I get comp time for those extra 18 hours and take it at some point in the future rather than the weeks they were earned? You say that you can’t accumulate comp time instead of overtime for hours past 40, and I assume that this is because hours past 40 are time and a half, and are therefore “worth” more than a regular hour in some other week. But since hours paid between 35 and 40 hours are NOT paid at at time and a half, is that the case with using those hours as comp time?

    1. TL -*

      I don’t think you can comp at all, actually! It’s illegal even if you offer comp time at an hour and a half (because the concerns of a business pressuring for comp time taken instead of pay, especially for, say, farmhands, who would have busy seasons and less busy seasons.)

      But your business could probably pay you for 40 hrs each week and offer flexibility as long as your hours stayed under 40.

      1. fposte*

        You can’t comp instead of legally required OT (unless you’re in the government), but Abigail isn’t talking about hours that are legally counted as OT, just in-house excess hours. Think of it as a part-timer being allowed comp time if she works over 20 hours a week–the DOL won’t care.

          1. fposte*

            And I may have misread Abigail so I could be wrong! Abigail, can you clarify whether you’re getting base pay + comp time for hours over 35 or just comp time?

      2. Pwyll*

        Yeah, I think that’s right. Most (every?) states have paycheck laws that specifically state that payment of wages is due x days from the end of the pay week. Comp time runs afoul of these rules because you’re not being paid in full for hours worked within that timeframe.

      3. Abigail*

        I’m 100% sure they would never start paying everyone who has an assigned 35 hour work week for 40 hours just because a few people occasionally have busy seasons where they attend a few conferences. It would be cheaper to just pay the hours worked. This is a university with a very well-established pay grade structure, so there’s no way they can, following their internal rules, start paying the 35 hour rate as a “salary” and not give anything to the people who have to work sometimes between 35-40 hours. I mean, I guess they COULD but that would be really crappy.

        1. Gene*

          Assuming your university is a government entity, you should still be able to accrue and use comp time. We have a departmental policy to not allow accrual of it here without prior approval due to one shop abusing it a couple of decades ago.

        2. Ask a Manager* Post author

          If you’re a state university, you’re probably legally allowed to get comp time. State employees are conveniently exempt from that portion of the law.

          1. jstarr*

            We have been told at our state uni that there will be no overtime pay and that we will have to take comp time instead at time and a half. This is causing no small bit of yelling in some departments.

            1. GigglyPuff*

              But I think the comp time still has to be earned at 1.5 time? Maybe, possibly…

              That’s what it sounded like in the e-mail from my state govt. where I work, because all our previous comp time is getting reset/wiped out before Dec. 1 that way all the new time accrues at 1.5.

          2. Lemon Zinger*

            I work at a state university and recently heard that this is what my department will be doing. I’m okay with it, since my boss will probably just let me take half-days every Friday, since I regularly work overtime on Tuesdays, Wednesdays, and Thursdays. For me, time is just as valuable as money!

            1. fposte*

              As long as you don’t go over 40 in a week, that kind of comp time is legal under the FLSA–it only cares about time over 40 hours in the week (but, of course, it’s forbidden in California).

    2. fposte*

      The change in the law doesn’t affect any of that. Since it’s not OT under the FLSA, your company is free to continue to give you comp time for hours between 35 and 40 and do it however they want (assuming there’s no state rule I don’t know about).

    3. animaniactoo*

      You can only comp time an employee who is exempt for working overtime.

      An employee who is non-exempt must be paid their exact wage for all their hours worked, no matter how many or few that is and no matter whether it is more than they usually work while still being under the 40-hour mandated overtime pay threshold.

      1. fposte*

        Oh, I was reading it as an extra goody on top of pay for hours over 35 (basically, comp time instead of the extra .5 time)–if they’re completely unpaid, you’re right and I’m wrong.

      2. animaniactoo*

        Seeing fposte’s post that may be limited to certain states, but my understanding is that comp time is not something that can be offered in lieu of payment for non-exempt employees.

        1. Abigail*

          Alison’s article seemed to imply that you could as long as you gave it in the same week, but at the same time, she also specifically said that this was to make sure no week went over 40 hours at any given point:

          “If you’re in the group of people who must be paid overtime, you can only be paid in compensatory time if you use it during the same workweek. For example, if you normally work eight hours a day but on Monday you ended up working two extra hours, your employer could give you two hours of comp time to use before the end of the week – thus keeping your total hours for the week from going over 40.

          But you can’t bank comp time to use in a different week, because the law requires that you be paid – in money, not banked time – for all hours over 40 that you work in any given week.”

          What isn’t clear to me is if this applies even if the hours worked total less than 40.

          1. Natalie*

            If you are non-exempt, you have to be paid your regular hourly wage for all hours worked; you cannot be given comp time in lieu of your base rate of pay. You could certainly be given comp time *in addition to* your base rate of pay for any hours worked between 35-40.

      3. Ask a Manager* Post author

        That’s correct — unless the OP is salaried non-exempt, meaning her salary covers up to 40 hours a week (even if she normally works less than that) and they pay overtime for anything over it. In that case, she could normally work 35 hours a week but some weeks have to work 40, and her overall salary would cover that.

    4. Gaia*

      You can get comp time for those hours, but you also need to be *paid* for those hours.

      The way we do it is this. Our normal full time workers, like you, work 35 hours a week. If they work between 35 – 40 hours per week they are paid for those additional hours at straight pay + they receive that time as “comp” time to take off at their leisure. We’re not required to do this, we just do it as a little bonus for working more than usual. Anything above 40 hours is paid at time and a half and also receives comp time (hour for hour).

  5. M*

    I apologize if this has been asked and answered, but is there an exception to this law for governmental organizations? I know of many teachers who work much more than 40 hours a week and don’t earn the threshold, but also don’t have any way of tracking hours over 40 that they work — they are simply expected to get everything done. Do school systems and other governmental organizations have to change their practice, or are they exempt?

    1. fposte*

      Teachers, doctors, and lawyers are exempted from the law, but not because they’re governmental–private school teachers are exempt too.

      1. neverjaunty*

        Doctors and lawyers because they figure we can take care of ourselves, and teachers because nobody wants to pay teachers anything. :/

    3. Pwyll*

      Teachers are specifically exempt regardless of whether they’re in public or private school, and regardless of how much money they make.

      Other governmental agencies have special rules (for comp time, for example) but generally still have to meet the same salary thresholds for exemption.

    4. Lala*

      I believe teachers are not included under this law. I know there are stipulations/rules about what constitutes teaching, but overall, most teachers (k-12 and university level) aren’t going to be affected.

        1. Ask a Manager* Post author

          That’s not new — teachers, doctors, and lawyers have always been automatically exempt under the FLSA.

          It’s because they’re assumed to be engaging in work “requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment” — which isn’t the type of worker the law was designed to protect against exploitation/abuse.

          And of course, because of how legislation gets made.

            1. fposte*

              You mean “But what about maple sugar production?” isn’t in the forefront of every American’s mind?

          2. BRR*

            “because of how legislation gets made” in my head I’m comparing this to the explanation of “it’s magic.”

          3. Annie Moose*

            Which, of course, makes it so much easier to exploit teachers… *sigh*

            I was mostly excited about this law because I thought it’d apply to my family members who are teachers–maybe they’d finally start getting paid a decent wage! But no. Of course not.

            (I legitimately feel guilty about how much money I make. I don’t even make all that ridiculous of a salary–it’s pretty good for a mid-twenties single person, but it’s not amazing–but it feels wrong to make this much more money than my parents combined.)

            1. Kyrielle*

              Yes, I’m actually disappointed that they continue to exempt teachers from the law no matter their salary. I mean, they’re doing work requiring knowledge & etc. so let’s not pay them enough to eat, and then make them buy their own supplies besides. That’ll be awesome, amirite?

              When I was in high school, one of the career paths I considered was being a teacher. I chose not to, for reasons completely unrelated to the salary, because I was unaware of how poorly we pay our teachers then.

              And now? Now I am just horrified. That’s an incredibly important, complex, and over-burdened job, and the hours and effort are ridiculous…but still, we don’t have to pay them fairly. What?

              1. MegaMoose, Esq*

                I agree. The FLSA was passed in 1938 – I’m not sure whether the “predominantly intellectual” explanation held water then or not, but certainly with the shift toward white-collar work over the last century, I don’t think it makes any sense any more.

                1. Natalie*

                  I would damn near guarantee you that teachers were exempted for political reasons/sexism and not any kind of logic (flimsy or otherwise) about them being “learned intellectuals”.

                2. zora*

                  +1 to Natalie. By 1938, most teachers in the US were women, and a major argument for hiring more women as teachers was precisely because we could pay them less, and save the taxpayers money. Wheee, officially-sanctioned sexism! ;o)

            2. Evan Þ*

              Not to attack your budget at all – I’d be fairly hypocritical if I did; I make an unusually good salary myself – but if you want, you can always use your great salary to give to charity. There’re a lot of good groups that’re in bad need of money.

              1. Annie Moose*

                It’s a good point! I do donate some, but I really should do more. What I need to do one of these days is sit down and do a proper budget, with a particular amount set aside for charity. (I should do a budget in general, really.)

  6. CS Rep By Day, Writer By Night*

    My Fortune 500 company has still not given my management team any indication how they will be handling this, even though everyone in my department who’s not a manager falls under the threshold. I have a bad feeling that I’m going to come into work on December 1st and be told I’m a) hourly and b) am not allowed to work overtime anymore. And since doing my job in 40 hours a week is impossible, I imagine I’ll start looking for a new job after the holidays are over. It’s a shame because I actually love my job; but I’m severely underpaid for my position, and the fact that the company isn’t taking this opportunity to raise our salaries to market value is a deal-breaker for me.

    1. Greengirl*

      That was the plan of my former employer and part of why I left. I’m at a new job now where the salary is just at the new exempt threshold.

    2. Gene*

      Or just do what you can in 40 hours and go home. If they want the entire job done, they can pay you OT to do it. Or raise you above the threshold and make you exempt (assuming your job meets the other requirements).

      1. CS Rep By Day, Writer By Night*

        Our facility is on a non-OT lockdown for the foreseeable future, and there’s no money in the budget for my division for raises above COL. I expect we’ll be told that we need to be more efficient with our time and the micromanaging of non-work related conversations and computer use will begin in earnest. I’ve been there, done that and run screaming from it, so it’s not like it’ll be the first time.

        1. TempestuousTeapot*

          Same here. And as state employees, we’ve already been down the road of 1 to 1 comp time instead of 1 to 1.5. Now it’s: There will be no overtime. If you work over in a day, go to a conference, or work a weekend event/project roll out, you must take the last day(s) of your work week off, but still meet all your goals and expectations in a timely fashion. And we have a mid business week end to our work week. So, no more comp time at all, no overtime pay, but if we can’t produce at the same level we will be taken out to the woodshed…

  7. Overit*

    My Company is trying to skirt around the law. At first they were going to get time clocks, but it was deemed to expensive. They told us Last week that nothing is going to change. If we work over one week, just comp the time next week, like we normally do, but just keep quite about it. I tried to explain that any work done in that week had to be paid that week, per federal guidelines. My manager got really angry and “schooled me” on the purpose of the law, (that other companies were being unfair and making people work long hours but giving them no comp time) but our company has always been fair to us so its OK. She went on to say no overtime will be approved.

    1. Natalie*

      I know not everyone has the luxury, but if you are able and willing to fight this, filing a wage claim is pretty easy. If your director was foolish enough to put their directive in writing, it will be even easier.

    2. Joseph*

      “that other companies were being unfair and making people work long hours but giving them no comp time”
      True story: Those other companies are saying the exact same thing – It’s always Those Other Guys who are horrible and unfair, not us.

    3. MegaMoose, Esq*

      This stinks. Following the law isn’t about deciding that what you’re doing is “fair” or not, it’s about following the law. Even with comp time, you’d be losing out on the and-a-half part of overtime. I would keep track of your OT hours and look into filing a claim. And, unfortunately, finding another job if at all possible, because even if you can file the complaint anonymously and not have it tracked back to you, this does not sound like a healthy organization.

    4. Rebecca*

      My current company does this (T minus 4 days and counting until my last day). My “manager”, and I use the term loosely, allows non exempt workers to work extra hours one week, but tells them they can put just 40 hours on their time card for that week. The extra hours are “banked” for the next week, so that person can work fewer hours the next week and perhaps take an afternoon off in the summer. In other words, you have non exempt people working 40 hours + 4 hours OT in week one, getting paid for 40 hours, and then the following week, that person can work 36 hours, and use the 4 hours “banked” from the previous week to get paid for 40 hours.

      I have tried to explain until I’m blue in the face that this isn’t right. I also got scolded, and was told she is trying to be nice, and allow people a privilege in the summer. I tried to explain that the 40 + 4 OT should be paid that way, then the person could work fewer hours the following week and go home early, still earning a regular 80 hour pay, but to no avail.

      And yes, there are hand written notes and emailed instructions on how to make notes on time cards to indicate this is what you did.

  8. Aggravated Manager*

    I hate it. My organization has non-exempt support staff and exempt professional staff. My two part-time exempt professional staff are now non-exempt support staff, dividing my department in half. I wish the government had made allowances for part-time staff. Non-exempt professional staff is not an option.

      1. Aggravated Manager*

        My organization decided it isn’t. Our entire structure is built on Support Staff/Professional Staff. Their decision was to make all part-timers support staff, regardless of the level of their job or education level required.

        1. fposte*

          Ouch. I do find that part-time gives my non-exempt staff a little more wiggle room if they’re allowed to be flexible, since they don’t have to take PTO for shorter absences. So that’s one small advantage.

  9. Outlier*

    I’ve been following this since AAM first posted, but never thought it would affect me because I make a decent amount more than the threshold. I guess bigger corporations have additional requirements to account for? Since a few people in my role classification make under 47, everyone in the role has to track hours and get paid overtime.

    2. Natalie*

      No, there’s no different rules for large corporations. What most likely happened is that they reexamined your job duties and realized you didn’t meet the duties portion of the exemption test. Alternatively, someone in your legal department may think it’s just safer to treat everyone in the same job class the same for vague lawyer reasons.

    3. Joseph*

      Given that everybody in your exact same role need to do it, I’m betting they just realized was easier to include all Teapot Makers rather than cherry-pick only specific people. Several possible reasons for this:
      1.) It keeps individual salaries quiet. If Andy and Betty are the only ones required to fill out timesheets, that blatantly indicates “Hey, they make less than $47k” while Charlie’s >$47k salary is clearly indicated since he doesn’t need to.
      2.) It’s a lot less hassle. If the salary band for Teapot Maker ranges from $45 to $55k, it’s easier to just include all Teapot Makers than to have two different systems for the same design. After all, your boss probably isn’t an expert on the salary threshold, so it’s easier for him to just require it from everyone.
      3.) Future flexibility. If they make it so only people subject to it have to fill out timesheets, what happens when Jane gets a raise from $46k to $48k? Does she suddenly stop doing timesheets?
      4.) Avoid potential legal issues if your salary decreases for some reason mid-year (e.g., major illness with unpaid time off). If you take a month off so your salary slips from $50k to $46k, would you then be owed back pay for all that overtime? I honestly don’t know how that works and it’s possible your company isn’t clear on it either.

      1. Elsajeni*

        I also think it’s less likely to make people feel like they’re being treated unfairly — it’s weird to see someone else with exactly the same job title and duties as you be treated very differently, especially if you know the only reason is a relatively small difference in your salaries, and I can imagine people feeling hard-done-by on either side of the exempt/non-exempt divide. Either “Charlie and I do the exact same job, but just because he makes $2,000 more than I do, he’s exempt and gets flexibility and freedom with his schedule, while I have to punch a timeclock and micromanage my hours” or “Andy and I do the exact same job, but just because I make $2,000 more than he does, he’s non-exempt and gets sent home at 40 hours, while I’m expected to work unpaid overtime until everything gets done.”

    4. Karen K*

      Oddly enough, I sent AAM this very question this AM. Because our mid-range for my job is under the threshold, they’re treating everyone in my job classification the same, even though most of us make well over the threshold.

      They haven’t decided what to do yet. I do not want to go back to being hourly and clocking in and out. I won’t leave my job over this, but still, it’s annoying.

      1. Karen K*

        Also, we don’t know how overtime will be treated. I think some of us work more OT than others. I, for example, rarely work over 40 hours in a week, so no change for me. But, some of my colleagues regularly work OT, especially during certain parts of the year. I don’t think that salary budgets are going to magically expand to accommodate OT.

  10. Gene*

    A lot of the complaining about this change I see seems to be ego driven. If you’re doing the same job, how is tracking your hours and being paid overtime a blow?

    I really don’t understand; but I’ve been working in the government since I got out of high school…

    1. Elemeno P.*

      I don’t understand, either. I’ve always been hourly, and people seem to take it as a slight.

      This law guarantees that, when making under a certain amount, you get paid for the time you work. If that’s an issue for certain positions, the companies need to examine how much they’ve been relying on unpaid labor.

    2. Ask a Manager* Post author

      There are legitimate downsides to it for some people. For example, some people will have loss of flexibility, if they’ve been able to flex their hours as workload changes. If you’ve been allowed to, for example, work 30 hours this week and 50 hours next week to get caught up, lots of people won’t be allowed to do that anymore. Another example: If you’ve always been responsible for managing your own time and could spend an hour mid-day browsing the internet for fun as long as your work got done, your manager is suddenly going to care that you’re doing that if it means paying you for an overtime hour later in the week.

      1. Karen K*

        Yep, this is it. No slam on hourly employees, but I’ve been managing my own time for a long time now. I am not looking forward to nitpicking my PTO again.

      2. Nichole*

        Yeah. I see those and man I wish I would have that flexibility, but as an exempt employee I decidedly don’t.

        I mean, I understand that my fortune comes in that fact that I’m making above the salary threshold, but the only advantage I can see that I get from being exempt is that in the extremely rare case that my work is closed (which requires the state my company is in to declare a state of emergency and make it illegal to be on the roads) I get paid anyway without needing to use PTO.

        I still need to track my hours and work a minimum of 40 hours a week, but if I work less than 40 I need to use PTO to bring me up to 40. I guess I’m a little jealous of people who get actual flexibility along with being exempt.

        1. Abigail*

          Wait wait wait….so your company nickels and dimes you for anything under 40, but won’t pay you extra if you work more than 40?

          That’s extremely crappy and I’ve never heard of such a policy.

    3. Sans*

      I agree. At my husband’s last job, he was in retail mgmt — infamous for unpaid overtime. But luckily, he was considered hourly. So he rarely worked over 40 hours and was paid when he did.

      Just fine with him – no problem with ego at all. He was glad not to be taken advantage of.

    4. Abigail*

      I can totally understand why. For some jobs, like mine, it is just easier to check into work on an as-needed basis. I check my email and respond at 7pm, and sometimes even do some other tasks that come up urgently. Since I’m non-exempt, I don’t get paid for this time. It’s not really required that I do it, but in order to do a great job and have things come in on time (I have to wait for other people to send me stuff, and these people are often not in my time zone or work non traditional hours), you kind of just need to do it.

      It would be such a stress relief if I were just paid a salary, given that I’ve never ever seen a dime of overtime pay. That way I wouldn’t have to use sick time to duck out for an appointment, and I could have the freedom to duck out a few minutes early to run an errand and then check back in later that night without watching the clock.

      For some jobs, it makes sense to be hourly. Receptionists who answer phones need to be there during office hours. Fast food workers. Factory workers. You’re either on or you’re off in those kinds of jobs. But lots of other jobs don’t really work best that way.

      1. Natalie*

        “I check my email and respond at 7pm, and sometimes even do some other tasks that come up urgently. Since I’m non-exempt, I don’t get paid for this time.”

        Since you’re non-exempt you’re supposed to be paid for this time. You’re not going unpaid because of the law, but rather because your employer is breaking it.

        1. Abigail*

          No, because they just say that doing so is not required. I choose to do it because it makes my work run smoothly. If I did not do it, I could say “I got that email at 5:01pm so it had to wait until Monday” and that is fine with them, but it messes with my own schedules for my work.

          2. GeorgiaPeach*

            That’s actually not how it works. Whether they say it’s required or not, when you check email from home you are working and need to be paid. It’s actually a huge liability for them to allow you to do this and not have you clock in, because you could bring a claim against them later for back pay.

            1. GeorgiaPeach*

              Sorry Alison! I had been reading comments for awhile and they hadn’t updated to reflect yours.

    5. Princess Carolyn*

      Alison already pointed out the legitimate downsides for some people, but I do notice a few people out there seem to think that being hourly means you’re not in a “professional” or “big kid job” type of role.

      FWIW, most copy editors, news reporters, graphic designers, copywriters, and various creative types will spend their entire careers in hourly positions. (In jobs like this, you could get promoted to an exempt management position, but you also could get promoted to a “senior” reporter/designer/whatever, with no real managerial duties.) The new threshold seems to suggest that a lot more professions will be falling into that category now, so perhaps people will be less likely to equate hourly with low-level.

    6. Elsajeni*

      I’m being converted to hourly, and part of the reason I’m unhappy about it is that I’m in a position that has never required significant overtime — so there’s very little or no upside for me in terms of increased pay or increased free time, but I still have to start using a rigid time-tracking system, lose the flexibility and freedom to set my own schedule that I really value, etc. (Some of this is down to the way my employer is choosing to handle the transition, too; they don’t have to make me switch to this very rigid system, but it’s easier on their end.)

  11. Emi*

    When I work more than 40 hours/week, I get “credit hours,” which I can carry from pay period to pay period and then use like annual leave. Is this no longer considered legitimate?

          2. GigglyPuff*

            You might want to check that those “credit hours” or comp time isn’t getting reset on Dec 1.

            1. Emi*

              I.e. check to make sure they don’t clear out all the credit hours I’ve racked up? Or change the rules about how many credit hours I can carry, or what? Thank you!

              1. GigglyPuff*

                That they aren’t getting cleared out/erased. I work in state govt. and all of ours have to be used by Dec. 1 or we lose them.
                I mean your HR could be handling it different, but I’d still check.

  12. Kore*

    Wondering how this will affect my job. Currently I make under the threshold and I’m salaried. However, my company does offer overtime if you request it in advance. The trouble is, most of my work can’t be requested in advance – for example the Friday before last I got a call at about 4:30 asking me for help and I had to stay an extra hour or two in advance. I usually try to self correct my time, but I usually end up working more than 40 hours, though not by much. I wonder if I’ll have to ask my manager (since not many people around here make less than that threshold!) but I know it’ll affect others a lot more.

    1. BRR*

      I would ask your manager what the plan is once the new rules take affect and if you will be nonexempt then I would ask in advance about last minute requests (you could use the example you just gave) and ask how you should handle it. The way things tend to happen is your manager will be out when this comes up for the first time.

      1. Kore*

        Yeah, I think I’ll do that – I’m happy to be more stringent about working 40 hours a week, but there’s no way I can predict when/if I’ll need overtime.

        1. Natalie*

          Just in case you don’t know this – in the event you end up working unauthorized overtime, they *cannot* refuse to pay you for it because it was unauthorized. You have to be paid for all hours they “suffer or permit” you to work.

          1. Jilly*

            Absolutely. However, you can be reprimanded or even fired for violating the policy of no unauthorized overtime.

  13. Above the Threshold*

    I met with my boss last week for my bi-annual review and was pleasantly surprised when she informed me my salary would be increased. I have received two raises already since working here (I have been employed with this organization for roughly 1.5 years) and honestly was not expecting them to bump up my salary again, especially considering this would constitute a $6,000 raise. She cautioned me that this would likely mean I won’t see another raise again for a year or two which I definitely don’t have any complaints about. Very happy that I get to keep my flexibility and that my paycheck will receive a significant bump starting this month.

    I hope that those who haven’t heard anything or haven’t received any positive signs from their employers will receive good news soon!

  14. Mononymous*

    I’ve been watching posts about this law with interest. It doesn’t impact me, but does very much impact a good friend of mine (retail manager, currently exempt, paid somewhere near the current threshold/nowhere near the new one, works up to 70 hrs/wk regularly). His company seems to be willfully ignoring this new law so far, sort of a “LA LA I CAN’T HEAR YOU, WHAT NEW LAW?” approach.

    What happens if they just continue to pretend the change doesn’t exist–is there a way to press the issue without endangering his job? It’s a chain of stores, so could someone potentially file an anonymous complaint against the company in general without specifying which location, and thus without outing a specific employee?

    1. MegaMoose, Esq*

      I’m pretty sure that you can complain anonymously, though the process would likely take some time. The one thing your friend absolutely 100% should do in the meantime is to document all the OT he works so it can be claimed as back pay.

    2. JoAnna*

      DOL wage complaint would be the best idea if they refuse to pay him OT after these changes go into effect.

    4. neverjaunty*

      He should speak to a lawyer who specializes in representing employees. That person can advise him on how to proceed, and also on how to protect him from retaliation.

      A company that ignores the new law is stealing from your friend, just as much as if they literally picked his pocket.

  15. Sabrina the Teenage Witch*

    We just had our bi-annual meeting and I was shocked when there was no mention of this. I brought it up to my manager when I first read about it on here and she said that it doesn’t matter for us, the work still has to get done no matter what. I have a feeling no one really knows anything and the walls will come tumbling down on December 1.

    1. Ask a Manager* Post author

      That’s such a weird answer that has nothing to do with anything! I don’t think walls will come tumbling down on Dec. 1 — I think they’ll just continue on as usual, unless employee(s) speak up and insist on action.

    2. The IT Manager*

      It is a weird answer and useless one. I’m betting the manager doesn’t do much (if anything) with pay and doesn’t know (or possible understand) anything yet, but all she knows is that her teams work must still get done. I’m not defending her; she needs to push her bosses for a decision ASAP.

      But I am 100% agreement with what Alison said. It really sounds like nothing will change at your company until someone makes them comply. It really sounds like your company has its head in the sand.

    3. zora*

      I’m late to this, but is it possible she means that they will pay whatever overtime they need to to get the work done?

      possibly not, but that is the only legal option ;o)

  17. LizB*

    My whole department is moving from salaried exempt to hourly with no OT allowed starting in mid-November, with the idea that any kinks in scheduling and workloads can be worked out by the time December 1 comes around. I’m cautiously optimistic, because I do think my managers and the higher-ups are committed to not making us work overtime, and doing whatever they need to do to make our workloads reasonable and give us some work-life balance.

    I am, however, a little worried about slow periods. My company converted my annual salary to an hourly rate based on a 40-hour workweek, so in order to get the full salary amount I currently earn I need to work exactly 40 hours every week. My field has slow periods at certain times of year where it will be next to impossible for me to have a full 40 hours’ worth of things to do. I’m worried I’m going to be losing out on money on those weeks, and since we’re not allowed to work OT I won’t be making it up anywhere. I’m not sure how to ask my managers about it without sounding greedy, though.

    1. TL -*

      It’s unlikely they’ll kick you out – just stretch out your workday and be leisurely during slow periods.

      Also, it’s not greedy to want your salary. If you’re truly concerned, talk to them.

  18. ThatGirl*

    I have talked a bit about my husband’s situation with this in the Friday thread. He works at a small private university as a mental health counselor. He is under the threshold and they don’t want to pay hourly because he has on-call time that would need to be reimbursed. So their solution was to make his position 10-month which would effectively give him a small raise and two months off, “unpaid”. While he’d prefer to just make the $47 k, he was OK with this.

    Problem is, now they are hemming and hawing and December is one month away and one of the few months it would make sense for him to have off. He is afraid they won’t raise his pay appropriately. I told him they better, and if it gets screwed up, the department of labor would like to hear about it…

  19. yif*

    I asked my HR person about this last month and she said she was having a meeting the next week to discuss it. Since then, I have heard nothing. I honestly have no idea what will happen here. There are many people (myself included) who are just a few thousand below the threshold, and it makes sense to just bump us up, given that we all work overtime (I’d only have to work 4 hours of overtime a week to end up earning the threshold salary with my regular salary = time and a half). But there are many people a step below me on the ladder who make WAAAAY under the threshold and work SOOO much overtime. If they try to tell us that we can’t do overtime, absolutely nothing will get finished.

    1. BobcatBrah*

      Yeah I’m in the same boat. 45 hours a week and I’ll hit the threshold. I normally work about 55 week though. I’m getting a raise to 48k, but boy I do wish I just got the overtime.

  20. Hlyssande*

    Just found out a few minutes ago that they’re having to re-bump my pay to keep in line with the expected increase for 2017, because the company is pushing back raise reviews next year.

    Not complaining.

  21. fulton*

    If my company switched us to hourly, how would that affect Summer Fridays, when we get to leave four hours early? Would we still get paid for those four hours as if we were at work? Would we not get paid? Would they disappear?

    2. MegaMoose, Esq*

      When I’ve been non-exempt and worked places with summer Fridays, we were expected to put in longer-than-usual days Monday through Thursday to make up the hours. I think California is the only state that requires overtime if you work more than 8 hours in a day – federal law only cares about hours worked in a week. But your company could pretty much do whatever they want so long as you aren’t working more than 40 hours in the week.

  22. Coco*

    This doesn’t relate exactly to the new law, but regarding exemptions: Are teachers, doctors, and lawyers always exempt from minimum wage requirement? Let’s say you’re employed as a full-time public school kindergarten teacher and you’re paid $2/hr — is that legal simply because you are a teacher?

    1. fposte*

      If you’re hired as a full-time public school kindergarten teacher, your contract almost certainly has no hourly rate anyway. But if your workload breaks down to $2 per hour over the year, it’s legal if you’re in a state where there are no further protections and in the following common cases:
      “Teachers are exempt if their primary duty is teaching, tutoring, instructing or lecturing in the activity of imparting knowledge, and if they are employed and engaged in this activity as a teacher in an educational establishment. Exempt teachers include, but are not limited to, regular academic teachers; kindergarten or nursery school teachers; teachers of gifted or disabled children; teachers of skilled and semi-skilled trades and occupations; teachers engaged in automobile driving instruction; aircraft flight instructors; home economics teachers; and vocal or instrument music teachers. The salary and salary basis requirements do not apply to bona fide teachers. Having a primary duty of teaching, tutoring, instructing or lecturing in the activity of imparting knowledge includes, by its very nature, exercising discretion and judgment.”

      1. Coco*

        Thanks! The reason I ask is because I called my state DOL about this issue and it they provided contradictory information. I am a community college instructor (no union, no contract) paid essentially on commission that averages out to less than minimum wage. I explained my situation, and the DOL representative I spoke to said that it needs to average out to minimum wage, but he didn’t mention (and I’m not aware of) any additional protection in my state. Should I assume he didn’t know about that exception or something?

        1. fposte*

          Not sure what you mean when you say “commission”–are you paid on a 1099 rather than salaried? If you’re on a 1099, none of this applies to you.

          (I don’t know of a state with any additional protections but I also didn’t check, so I just put that in there to cover myself.)

          1. Coco*

            I don’t know about 1099, but we’re not contractors, if that’s what you mean. We’re only sort of paid hourly (we don’t “clock in” or track hours), and we’re not salaried. We’re paid based on the number of in-class hours we attend. The DOL guy said this is basically being paid on “commission.”
            Example week 1: Spring break, no in-class hours attended, paid $0
            Example week 2: Taught 8 hours of class time, paid $400
            Example week 3: Taught only 6 hours of class time due to federal holiday, paid $300

              1. Coco*

                No, the DOL said it’s NOT kosher, but what you’re saying makes me think it is legal and he was wrong.

  23. Stellaaaaa*

    I know a lot of younger adults who are worried about this. They just got their first exempt/salaried jobs and are worried about being moved to hourly pay and inconsistent paychecks. It’s a big deal if you thought you were going to be able to move out of mom’s house and now you can’t count on a consistent salary anymore.

    1. falconcrest*

      Yes, this is what bothers me about the whole “we’re lowering your salary, but when you factor in time and a half from overtime, you’re still making the same amount” because at my job, there are very busy times and very slow times, and some weeks I would be rolling in OT money, and other weeks I’d have to really struggle to come up with 40 hours of work.

      1. Stellaaaaa*

        My sister works 70-80 hours a week at her NYC media job. She’s still in that mode of feeling energized by the bustle of the city and feeling needed at work, and she’s under a lot of unspoken pressure to log as many hours as possible. She’s more than 10k under the threshold; there’s no way she’s getting that raise or having any overtime authorized. Her whole immediate career plan (proving her value and establishing relationships after-hours) is taken off the table.

        So there’s that side of it too. There’s a whole model of business and employment that’s predicated upon clocking a lot of time for $35k at the entry level and now millennials have no model for what to do.

        1. Pwyll*

          This. A friend of mine is in a similar type of job, and her company is going a bit crazy with the departure of their long-time Operations VP. Given no one is doing operations now, my friend brought up to her boss (temporarily the CEO until new Ops can be hired) the new overtime rules and asked what the plans were and was told there would be no raises, and to not put in the late hours, “You’re not being a team player.” And they’re certainly not going to pay overtime.

          It’s incredibly frustrating given the bulk of the people doing the work there are early-career millennials who thought they were going to put their heads down and put in their due and all that, and are now faced with the prospect of being cheated or filing a complaint.

          1. neverjaunty*

            “You’re not being a team player” is the work equivalent of “You would if you loved me.”

          2. Slippy*

            Silver lining for all of the millennials you mentioned is that they are either going to get paid more or have more free time.

    2. Princess Carolyn*

      Sure, but lots of hourly jobs still provide consistent income. I would be surprised if many white collar, professional, office-type jobs start dropping their employees below 40 hours. If their responsibilities are designed to take 40 hours a week, their hours are not likely to change.

      1. Natalie*

        If people were being properly classified, a *lot* more white collar, executive jobs would actually be non-exempt.

  24. Mimmy*

    I honestly think this new law should’ve been phased in over time – it seems to be creating an awful lot of confusion for employers and employees.

    Geez, what a good time for me to re-enter the workforce! *headdesk*

    Oh – I do have one question: Would this affect part-time jobs? A job I applied for is 20 hours a week I think. No, pay doesn’t even come remotely close to the new threshold.

    1. Natalie*

      There is no “part time exempt” exception under the threshold, so you would need to be paid on a non-exempt basis.

    2. MinB*

      Employers had well over a year’s notice that this was coming. Employers who willfully chose to put off dealing with the consequences of a new rule now would still be putting off dealing with it if the timeline were moved out a few years into the future.

  25. SSS*

    Personally I’m up in arms about the way the department I work in has handled this. They chose to bump everyone who was under the threshold up to the new threshold which means the people with 5-10 years experience are now getting paid the same as the guy that started last week. The job requires extensive knowledge in a certain field that new people haven’t gained yet but are being compensated for in a very big way. It’s a sad day when the department chooses to not acknowledge and compensate the experienced and tenured employees as well.

    1. MinB*

      Over time this should self-correct. Either employers will bump up the pay for experienced employees beyond the minimum threshold or those employees will seek out new jobs that will pay better.

      I’m also expecting the labor market to tighten – so many places have been running with a skeleton crew for so long. Now that they can’t make lower-level staff work endless overtime for free, the cheapest way for them to meet the same productivity levels (at least in the short term – automation is a longer-term factor) will be to hire more people to cover those hours. When unemployment is low, employers have to compete for employees and workers benefit. I’m hopeful that we’ll see income inequality decrease and benefits like paid vacation, sick leave, and family leave become more common across all income levels.

  26. Qui*

    Personally, I’m pretty frustrated by the law. I work in community mental health, and it’s sort of unspoken in my area that with that comes a lot of off the clock work (case documentation, responding to emails, etc.). My company has told me that we have no allowance in the budget for OT, no matter how necessary, and some of us are unable to flex our schedules due to program restrictions. Our higher-ups literally said in a meeting to all of us “just manage your time better.” That one went over pretty well!

    I’ve been trying to work with my supervisors to try to make things as efficient as possible, but it hasn’t been helpful at all.

  27. Pinkie Pie Chart*

    I haven’t read everything here, so apologies if this has already been asked.

    How does it work if you make over the minimum for exempt status, but your job does not qualify as an exempt position? In specific, an IT help desk position is usually exempt/salaried, but as far as I can tell, does not qualify as exempt.

  28. Runemarks*

    Thanks so much for this. I’m under the salary threshold and I sincerely doubt they will give me a raise since I don’t really work overtime and I only started in July. We’re a non-profit but we definitely go over the $500,000 threshold and even if they didn’t, part of my job is mailing and calling people all over the country. It looks like I’m going to have to bring up the issue with my employer and these are great talking points. There’s been absolutely no discussion of this law at work, I think it’s because the vast majority of my coworkers make more than the salary threshold.

  29. NonprofitNonsense*

    I work for a not for profit and half our salaried staff will be impacted by this. I’m privy to some of the HR dealings and know that each person had a meeting with their manager to discuss the changes. This is what they told everyone: when they determined their salaries when they where hired, they considered the fact that they would be working an undetermined amount of overtime by default. So under the new law, they are only going to give these folks the half (not time and a half) for any hours worked over 40 a week. Is that right? Based on what I read for not for profits, they can say “you’re scheduled for 50 hours a week, we’ll give you the half for the extra ten hours and time and a half for anything over 50.” It doesn’t seem right to me that they wouldn’t tell them upfront how many hours they are expected to work. And a lot of these people work 60+ hours a week since we are extremely short staffed.

    1. Ask a Manager* Post author

      Yeah — did not see that coming. I don’t think anyone did!

      If it had happened after the Dec. 1 implementation, I think a lot of employers would have stayed with the new rule because they wouldn’t have wanted to switch people and then switch them back. But coming as it does 10 days before the implementation date and with a new administration and Congress coming in, I think there’s a decent chance we won’t see this move forward in this form at all.

      A shocking development!

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