Frustrated Pay Rant/Whine

[Colleen27]

So, a few weeks ago DH's boss (company owner) approached him about moving from hourly to salary. He's taken on sort of 'assistant manager' role within his unit, though there isn't really a lot of active management involved, just getting the paperwork in order for the other trucks before getting his and going out into the field on the days when his supervisor isn't available to do so. He didn't accept immediately but after a discussion with his immediate supervisor, who explained to him that base salary would be figured at 50hrs/week at his standard (non-overtime) rate. That would work out to be less than paychecks that had extensive overtime, but about 2% above his 3-month average check so he accepted.

So yesterday was his first salaried paycheck. Guess what? It is figured at 40 hours for a pay cut of about 10% compared to average - it was literally the 3rd smallest check he's had in the entire time he's worked there. And of course since they shifted him to salary he hasn't had a week where he put in less than 60 hours.

I am so frustrated right now. With him for not getting a specific number from human resources before agreeing to the change. With his supervisor, who isn't front office but has been with the company since it was started and should have known how things work. And most of all with the economy that has us in the position of just having to swallow this because even if he had the time to look for something better the odds of finding it are slim to none. He did go to the woman who handles payroll/human resources to discuss it and she said she'd talk to the owner about it but I'm not holding out much hope for a positive resolution.

 

[disykat]

A verbal agreement should have SOME meaning. They promised 50 hours of pay, that's what he should receive.

 

[si-am]

That was sneaky, and I'm sorry for the pay cut. Most salaried jobs don't have overtime; you get paid the same no matter how many extra hours you work.

I hope there is some other extra benefit that comes from the salaried position!

 

[disneyhand]

Perhaps it's just a communication error? If not, could your husband request going back to hourly? I'm sure the owner can understand that's too big of a pay cut for a title/ status change and not the way promotions usually work.

 

[Colleen27]

A verbal agreement should have SOME meaning. They promised 50 hours of pay, that's what he should receive.

The problem is that his supervisor has nothing to do with front office, and has been very apologetic. I don't think he misled DH on purpose, I think he genuinely misunderstood how the base salary would be figured. But DH should have asked these questions of HR beforehand! He's not great at being assertive when it comes to issues of pay/benefits... When he was unemployed back when we were dating, he actually took a job without ever asking what they were paying because in his mind anything was better than nothing... Except as it turned out they were paying much less than industry norm, to the point where he'd have been better off flipping burgers.

That was sneaky, and I'm sorry for the pay cut. Most salaried jobs don't have overtime; you get paid the same no matter how many extra hours you work.

I hope there is some other extra benefit that comes from the salaried position!

I hope so too. That's something else he hasn't asked about - management pays a lower percentage of health insurance premiums and vacation time is based on both longevity and rank, but he hasn't asked about how either might be effected. This isn't a position that existed before, it was basically created for him in response to the fact that his supervisor has been traveling to other branch offices and coming in on his day off to get the guys who work Saturdays started. So there seem to be some not-yet-hammered-out details.

Perhaps it's just a communication error? If not, could your husband request going back to hourly? I'm sure the owner can understand that's too big of a pay cut for a title/ status change and not the way promotions usually work.

That's what I'm hoping. DH isn't nearly as concerned about this as I am which is why I'm venting here rather than to him. This company has been excellent to work for so far and I think he's just assuming that they'll get it worked out to their mutual satisfaction. I, on the other hand, as master budgeter and keeper of the household books, am having a minor freak-out over the unexpected bump in the road.

 

[OLT2004]

The Federal Department Of Labor has rules about Salaried Management.
Do a web search...Sorry I do not have a link.

Your husband must directly supervise XXX numbers of employees...
He must spend XXX amount of hours doing administrative duties...

Many moons ago I used to work for a national restaurant whose name I will not mention but they were famous for their Orange Roofs...Any way they got the bright idea to put almost everyone on Salary...I.E. - Dish Machine Manager...They would work the person 60 to 70 hours per week - No OT - Straight Salary...On call 24/7...
"Managers" complained and the Orange Roof had to pay a huge fine and give back pay for "Salaried Management Abuse of Overtime".

Walmart was also recently nailed for something similar...

Check out the Department of Labor website...and Good Luck!

 

[NVDisMom]

FLSA
It's called the Fair Labor Standards Act. This article is about exempt vs non-exempt, which is the question here. Just because they want to pay him salary, it doesn't mean they legally can. Many large companies have been sued in class action law suits for this very thing. Two of which my DH has worked for in the past and we have gotten large sums in compensation, although not nearly as much as it would have been if he had been fairly paid overtime. Go figure! Good luck to you. Its a sticky situation...

 

[POOHsie]

I'm not saying there's anything underhanded about OP's change to salaried, but it's been used to reclassify hourly workers, to save labor costs. It happened to our company in the mid-1990s. We were manufacturers, we all punched a time clock except a few sales, admin and management people. A new guy bought the company, and after we caught on that he was coming in to strip our company of assets then leave, he had a personal meeting with every single person. It was basically that we would become salaried or be replaced. Gulp. I had a young child and a mortgage. I couldn't afford to ruffle feathers.

We all lost a lot of pay. And the owner would have us stay late doing free personal jobs for him and his extended family, with company materials and labor. Like, staying til after 11 (for free) when my shift finished at 4pm. He was a brutal, awful human specimen.

Lucky for us, friends, colleagues, and the original owners stepped in with funds, and ran the guy off with legal action. We were only 1-2 months from complete collapse. They did get some money back, and we remained in business, but it was very tight for the next 2 years. We did go back to hourly, and the business is still operating today.

All I can say is, keep your eyes open for what the front office is really trying to accomplish. The owner may be OK, or he may have new financial partners who are demanding drastic cut-backs. There may be great misery ahead. Good luck.

 

[Colleen27]

The Federal Department Of Labor has rules about Salaried Management.
Do a web search...Sorry I do not have a link.

Your husband must directly supervise XXX numbers of employees...
He must spend XXX amount of hours doing administrative duties...

FLSA
It's called the Fair Labor Standards Act.

Thank you both. It is good to know that's there in our favor even though we'd prefer not to go to the 'nuclear' option of threatening action because for the most part DH does like this job.

I'm not saying there's anything underhanded about OP's change to salaried, but it's been used to reclassify hourly workers, to save labor costs. It happened to our company in the mid-1990s. We were manufacturers, we all punched a time clock except a few sales, admin and management people. A new guy bought the company, and after we caught on that he was coming in to strip our company of assets then leave, he had a personal meeting with every single person. It was basically that we would become salaried or be replaced. Gulp. I had a young child and a mortgage. I couldn't afford to ruffle feathers.

We all lost a lot of pay. And the owner would have us stay late doing free personal jobs for him and his extended family, with company materials and labor. Like, staying til after 11 (for free) when my shift finished at 4pm. He was a brutal, awful human specimen.

Lucky for us, friends, colleagues, and the original owners stepped in with funds, and ran the guy off with legal action. We were only 1-2 months from complete collapse. They did get some money back, and we remained in business, but it was very tight for the next 2 years. We did go back to hourly, and the business is still operating today.

All I can say is, keep your eyes open for what the front office is really trying to accomplish. The owner may be OK, or he may have new financial partners who are demanding drastic cut-backs. There may be great misery ahead. Good luck.

I don't believe this is the case. The company is small, family-owned, and the owner/founder is involved in the day-to-day operations but currently busy with new contracts and starting up other branches. They're a sub-contractor for govt but are also taking on some new contracts from banks and expanding beyond our immediate area. Everything we know about the owner thus far tells us that she's a good person, ambitious but ethical, and she's been good to work for up to this point... which is why DH is sure that when they can all sit down together they'll work out a more fair arrangement. It looks like we'll know more on Monday morning because that's the first time everyone who needs to be in on the meeting (DH, the payroll/HR person, and the owner) will be in the office.

I'm the skeptic/pessimist because I've been in situations like the one you describe and because DH has worked for companies that took advantage of their employees before (like reclassifying everyone as independent contractors to do away with benefits - probably also illegal but they were told they could either accept the change or the company would let them all go and replace them through a staffing agency). DH feels this company is different and I hope it turns out that he's right.

 

[nunzia]

The Federal Department Of Labor has rules about Salaried Management.
Do a web search...Sorry I do not have a link.

Your husband must directly supervise XXX numbers of employees...
He must spend XXX amount of hours doing administrative duties...

Many moons ago I used to work for a national restaurant whose name I will not mention but they were famous for their Orange Roofs...Any way they got the bright idea to put almost everyone on Salary...I.E. - Dish Machine Manager...They would work the person 60 to 70 hours per week - No OT - Straight Salary...On call 24/7...
"Managers" complained and the Orange Roof had to pay a huge fine and give back pay for "Salaried Management Abuse of Overtime".

Walmart was also recently nailed for something similar...

Check out the Department of Labor website...and Good Luck!

This is my suggestion as well. There are very clear rules about who can be considered 'management' and what job duties and responsibility levels he must have to be classified as such.