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Why is there an income ceiling on overtime in the US?

rtkwe 3y ago
You've got it backwards. It's not a ceiling on nonexempt jobs it's a floor for overtime exempt jobs. You're required to pay X in salary in order to categorize someone as a salaried employee as well as the other requirement on the type of work being performed.
OkayPhysicist 3y ago
It's more a floor on being exempt from overtime. Basically, the thought process is that salaried employees have a different relationship with the employer than others, in that they're more paid to get a job done, rather than for the amount of time worked. These employees also tend to have enough leverage against their employer to come to a fair employment contract. On the other hand, jobs on the lower end of the spectrum have much less leverage, and are being paid for their time. We, as a society, have a vested interest in companies not working their employees to death, so we discourage companies from overworking their employees, by making them pay extra to employ them more than a full-time job. The question then becomes: How do we differentiate these two classes of job? If you don't set a firm boundary, employers will pretend even the poor stiff working the nightshift at the gas station Quikmart is in the former category. The main rule for overtime exemption is "are you a professional or in management, or not?", with the 55k floor existing to make sure companies don't get too creative with job title labeling. The real ceiling on federally-mandated overtime is $107,432, at which point you're making enough that the government trusts you to negotiate advantageous employment terms yourself.
dragonwriter 3y ago
> Why is there an income ceiling on overtime in the US? There isn’t. There is a pay (and other conditions) floor on employers being exempt from the general federal requirement to pay overtime at a specified rate. (State law may impose similar requirements even where federal exemptions apply, and even where both federal and state exemptions apply, employers may offer terms that involve overtime pay.)

You've got it backwards. It's not a ceiling on nonexempt jobs it's a floor for overtime exempt jobs. You're required to pay X in salary in order to categorize someone as a salaried employee as well as the other requirement on the type of work being performed.

OkayPhysicist 3y ago

It's more a floor on being exempt from overtime. Basically, the thought process is that salaried employees have a different relationship with the employer than others, in that they're more paid to get a job done, rather than for the amount of time worked. These employees also tend to have enough leverage against their employer to come to a fair employment contract. On the other hand, jobs on the lower end of the spectrum have much less leverage, and are being paid for their time. We, as a society, have a vested interest in companies not working their employees to death, so we discourage companies from overworking their employees, by making them pay extra to employ them more than a full-time job. The question then becomes: How do we differentiate these two classes of job? If you don't set a firm boundary, employers will pretend even the poor stiff working the nightshift at the gas station Quikmart is in the former category. The main rule for overtime exemption is "are you a professional or in management, or not?", with the 55k floor existing to make sure companies don't get too creative with job title labeling. The real ceiling on federally-mandated overtime is $107,432, at which point you're making enough that the government trusts you to negotiate advantageous employment terms yourself.

dragonwriter 3y ago

> Why is there an income ceiling on overtime in the US? There isn’t. There is a pay (and other conditions) floor on employers being exempt from the general federal requirement to pay overtime at a specified rate. (State law may impose similar requirements even where federal exemptions apply, and even where both federal and state exemptions apply, employers may offer terms that involve overtime pay.)