5 ms·

Since ~55K is the median income in the USA, its seems like a reasonable place to draw the line. https://www.firstrepublic.com/insights-education/how-much-does-

by ejb999 3y ago

Since ~55K is the median income in the USA, its seems like a reasonable place to draw the line. https://www.firstrepublic.com/insights-education/how-much-does-the-average-american-make https://www.firstrepublic.com/insights-education/how-much-do...

lotsofpulp 3y ago
What does median income have to do with whether or not an employee should be eligible for overtime payrates?
- kube-system 3y ago
  Because FLSA exemptions were intended for higher-wage white collar employees who were compensated well enough that they didn't need overtime pay. The median is a very logical frame of reference for this.
  - lotsofpulp 3y ago
    “Needs” overtime pay is quite loaded. Nobody needs overtime in the US compared to quality of life of Bangladeshi garment workers and rice farmers. The relevant question is do we want employees in America to be able to work 40, 60, 80, and 100 hours per week for $55k per year and the quality of life that goes with it. I would say a more logical frame of reference is being sufficiently high up such that you can increase budgets and payrates, so as to ensure business leaders are incentivized to sufficiently spend on staffing.
    - kube-system 3y ago
      My use of "need" here is not referring to Maslow's hierarchy, but our society's standards of labor law. I personally don't believe that people should be working 80 hours per week for $55k, but, adjusted for inflation, I have done it. However, I definitely don't think that companies should be permitted to force people to work 100 hours per week for $36k, which is what the DOL is prohibiting here. > a more logical frame of reference is being sufficiently high up such that you can increase budgets and payrates It's not a frame of reference unless it is a number.
    - AnthonyMouse 3y ago
      Someone who works 100 hours every week (60 hours of 1.5x overtime) at minimum wage makes $49010/year, so anyone making more than that in salary could just have their hourly rate set to the one that produces the same pay they get now. But then they'd have to do a bunch of inconvenient paperwork to track their hours, and lose part of their compensation if they don't actually average 100 hours every week.
      - lotsofpulp 3y ago
        I am not sure what the point is, but if this theoretical person were willing to work for $7.25 per hour, then they would not be offered to be paid a $55k salary anyway. Of course, the federal minimum wage is also needs to be updated, but I don’t think that has any bearing on increasing the exempt salary threshold.
        AnthonyMouse 3y ago
        > if this theoretical person were willing to work for $7.25 per hour, then they would not be offered to be paid a $55k salary anyway. If you work 100 hours a week for a $55k salary, you are averaging ~$10.50/hour, which is ~$8.10/hour base pay when 60/100 of the hours are overtime, and so more than federal minimum wage. If you uniformly work for that number of hours and then make that amount of money, neither the employer nor the employee really cares if you call it $55k salary or $8.10/hour with overtime. Except that if you call it the latter, the employer may try to limit your hours, or you may need to work less once in a while for personal reasons which the employer may be tolerant of from time to time but once the law forces hourly accounting it means that comes out of your pay. It also means you may get less of any other benefits that are paid based on your hourly wage instead of your salary once one is defined and turns out to be lower than the equivalent salary would normally imply. Laws like this are really weird when all they do is force the same transaction to be written in different terms, which is nothing but a new opportunity for the employer to write the contract in a way that benefits them and the employee may not understand or notice until after the consequences manifest.
- Tao3300 3y ago
  Gotta set it somewhere ¯\_(ツ)_/¯
AnthonyMouse 3y ago
~55k is the median household income. The median personal income is ~$37k: https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N
- dragonwriter 3y ago
  No, the ~$55k the GP was referring to isn’t the median household income (which is about $70k), but an annualization of the median weekly pay for full-time employed workers. Which would be the same as the median individual income (at least wage/salary income) if every person was employed full-time for the whole year. Which, of course, is very much not the case.
  - AnthonyMouse 3y ago
    Oh, good catch. I assumed it was the median household income because it wasn't the median personal income and the former is commonly mistaken for it because it comes up if you search for "median income" in many cases.

by ejb999 3y ago

lotsofpulp 3y ago

What does median income have to do with whether or not an employee should be eligible for overtime payrates?

kube-system 3y ago
Because FLSA exemptions were intended for higher-wage white collar employees who were compensated well enough that they didn't need overtime pay. The median is a very logical frame of reference for this.
- lotsofpulp 3y ago
  “Needs” overtime pay is quite loaded. Nobody needs overtime in the US compared to quality of life of Bangladeshi garment workers and rice farmers. The relevant question is do we want employees in America to be able to work 40, 60, 80, and 100 hours per week for $55k per year and the quality of life that goes with it. I would say a more logical frame of reference is being sufficiently high up such that you can increase budgets and payrates, so as to ensure business leaders are incentivized to sufficiently spend on staffing.
  - kube-system 3y ago
    My use of "need" here is not referring to Maslow's hierarchy, but our society's standards of labor law. I personally don't believe that people should be working 80 hours per week for $55k, but, adjusted for inflation, I have done it. However, I definitely don't think that companies should be permitted to force people to work 100 hours per week for $36k, which is what the DOL is prohibiting here. > a more logical frame of reference is being sufficiently high up such that you can increase budgets and payrates It's not a frame of reference unless it is a number.
  - AnthonyMouse 3y ago
    Someone who works 100 hours every week (60 hours of 1.5x overtime) at minimum wage makes $49010/year, so anyone making more than that in salary could just have their hourly rate set to the one that produces the same pay they get now. But then they'd have to do a bunch of inconvenient paperwork to track their hours, and lose part of their compensation if they don't actually average 100 hours every week.
    - lotsofpulp 3y ago
      I am not sure what the point is, but if this theoretical person were willing to work for $7.25 per hour, then they would not be offered to be paid a $55k salary anyway. Of course, the federal minimum wage is also needs to be updated, but I don’t think that has any bearing on increasing the exempt salary threshold.
      - AnthonyMouse 3y ago
        > if this theoretical person were willing to work for $7.25 per hour, then they would not be offered to be paid a $55k salary anyway. If you work 100 hours a week for a $55k salary, you are averaging ~$10.50/hour, which is ~$8.10/hour base pay when 60/100 of the hours are overtime, and so more than federal minimum wage. If you uniformly work for that number of hours and then make that amount of money, neither the employer nor the employee really cares if you call it $55k salary or $8.10/hour with overtime. Except that if you call it the latter, the employer may try to limit your hours, or you may need to work less once in a while for personal reasons which the employer may be tolerant of from time to time but once the law forces hourly accounting it means that comes out of your pay. It also means you may get less of any other benefits that are paid based on your hourly wage instead of your salary once one is defined and turns out to be lower than the equivalent salary would normally imply. Laws like this are really weird when all they do is force the same transaction to be written in different terms, which is nothing but a new opportunity for the employer to write the contract in a way that benefits them and the employee may not understand or notice until after the consequences manifest.
Tao3300 3y ago
Gotta set it somewhere ¯\_(ツ)_/¯

AnthonyMouse 3y ago

~55k is the median household income. The median personal income is ~$37k: https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N

dragonwriter 3y ago
No, the ~$55k the GP was referring to isn’t the median household income (which is about $70k), but an annualization of the median weekly pay for full-time employed workers. Which would be the same as the median individual income (at least wage/salary income) if every person was employed full-time for the whole year. Which, of course, is very much not the case.
- AnthonyMouse 3y ago
  Oh, good catch. I assumed it was the median household income because it wasn't the median personal income and the former is commonly mistaken for it because it comes up if you search for "median income" in many cases.