OVERTIME EXEMPTION: Closing the Gap - Part 3

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OTExemption_ALHR_HRComatrix©
It is a New Year, after a busy end-of-the year for all,  and several topics are awaiting for HR to address. This is a quick conclusion to our previously introduced Overtime Exemption series from last year, as the subject has recently been visited and revisited by many subject experts and organizations. We will bring the subject to a close, for now, in this note with a global peek snapshot.

Exempt from Overtime Pay: Those making  at least $684 a week


By now, organizations are set for the new Overtime rule: employees, including salaried ones who don't meet the duties test, who make less than $684 a weelk or  $35, 558 a year will be entitled to overtime pay. Overtime pay calculation has not changed: 1.5 times the hourly pay  (refer to specifics for proper calculation). Curious to see what European countries do? see here for the "minimum wage" and here for the compensation of  those who meet both the notion of salary and duty test, or "cadres". 

Overtime varies globally and per State: Your Guide


While the notion of overtime varies by country -such as in France it is due after 35 hours -  it is crucial to refer to the State regulation. It is important to pay attention not only to the 40 hours threshold but also to the consecutive hours and days of work in the week. You may find a source of references here and here. For basics on overtime guidelines by the DOL, click here.

Preparedness : To Pay or Not To Pay? Or Leveraging the Rule?


While there is no way around compliance, businesses had time to prepare for the change, meaning making the choice between paying for overtime or not. It would have called for some analysis and/or reclassification, redefinition of jobs, along with possibility of changes in benefits. While the new rule might positively impact the first bottom level of managers, mid level ones might now find themselves being closer to the lower quartile of pay grid than the upper one, as most won't see their salaries boosted up. Is there a matter of pay disparity and/or equity that needs attention?  If you want to revisit the subject of preparedness you may want to click here. Noteworthy for good practice in attempts to address the issues of pay disparity and inequity resulting from minimum wage increases is how many states have set a new threshold for salaried employees.

The overtime exemption rule might close the gap between the needs for sustainable pay and sustainable payrolls.

Après une fin d’année bousculée, nous entamons l’année avec une rapide conclusion de notre série sur les heures supplémentaires. Comme les dispositions varient autour du globe, au USA, elles varient d'Etat en Etat. Alors, les multinationales ou organisations qui opèrent sur différents Etats doivent se référer scrupuleusement aux  gouvernements locaux/étatiques . 

 Conçue pour ajuster les salaires et droits des "salariés", l'extension des heures supplémentaires à ceux qui font moins de $684 par semaine (Par comparaison ou par curiosité, vous pouvez consulter le salaire des cadres en France ici) a pour effet d'augmenter les salaires des agents de maîtrise et superviseurs, avec l'effet secondaire de rapprocher les cadres moyens du bas de l'echelle - dans la grille salariale des cadres -  plutot que le contraire. A noter aussi que par exemple en France les heures supplementaires sont dues apres 35h de travail par semaine. Aux USA la semaine officielle est de 40h quoique bon nombre d'entreprises comptent maintenant une semaine pleine aux environs de 30 heures, par souci financier plutot que par souci de preserver la qualite de vie des travailleurs. Triste conflict entre viabilité des entreprises et salaire viable pour les travailleurs?  Mais aussi, avec ce changement, les entreprises doivent prêter attention aux avantages sociaux/de fonction qui pourraient résulter des reclassifications nécessaires, de même qu'aux grilles internes de salaire. Un sommaire des révisions nécessaires peut etre consulté ici.


En tous cas, cela peut quand même faire quelques heureux mais la majorité des cadres qui ont vu leur salaires préalablement ajustés en prévison des changements annoncés il y a deux ans de cela resteront dans une zone d'ombre.

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