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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

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.

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.