Exempt Status

I keep seeing numerous articles about how Americans in white collar professional careers (IT, Healthcare, etc) are working 60+ hours a week regularly. These articles document how it impacts productivity and quality of work negatively and I have witnessed these effects as well throughout my own career. Knowledge workers, when tired, work slower, make more mistakes that need to be fixed, and when focused on punching a clock on order of management tend to be much less creative. The science backs it up over and over again, yet we keep doing it.

Given the science, our gains in productivity, and our unemployment woes, is it time to eliminate the exempt classification system? How would the quality of American life and the employment system change if suddenly when companies demanded that their skilled labor work more than say... 45 hours that they had to pay straight time for the next 10 hours, time and a half for the 10 after that, and double time for anything exceeding that?

I just got to thinking about this since I recently left my job as a Director level employee and am now doing contract work. I get paid for every hour I work... if I only want to work 30 hours, I can work 30 hours, it's my budget. If I am asked to work more, it's more money in my pocket. I've found that my stress level and life satisfaction are through the roof and more and more as I look back to my w2 employee days, I feel that the pressure for salaried employees, based on a 40 hour workweek to work more is... well... at the risk of sounding leftist... immoral. It seems to me that the whole basis of capitalism is compensation for value, and there's a huge chunk of value being given by educated, skilled people that is actually reducing their compensation on a per-hour basis. What's more, a salaried position used to mean you were accruing a pension and other benefits that were meant to inspire loyalty to the employer. Nowadays most companies have eliminated all long term incentives for employees and in fields like mine (IT) the average worker tenure has dropped to under 3 years before a job change. I read articles and hear business leaders bemoaning how tough it is to find and retain great workers, but they don't seem to realize that they've removed long term incentives.

Is the exempt classification outdated? Do you think it would be a net gain or net harm if we were to eliminate it for everyone except officers of companies?

Cool. Let's unionize white-collar jobs and make this happen.

how does American productivity compare with German or other European productivity, who enjoy triple the vacation time and maybe 60% of the average work week?

bandit0013 wrote:

It seems to me that the whole basis of capitalism is compensation for value, and there's a huge chunk of value being given by educated, skilled people that is actually reducing their compensation on a per-hour basis.

The whole basis of capitalism is to convert excessive productivity into profit for the owners/controllers of the means of production. And that's directly where the pressure to work longer comes from because the naive assumption (on the part of owners/controllers) is that the more hours you work the more you will produce. As a worker I get compensated for my labour not for my value.

There was a really nice Salon piece about working hours
http://www.salon.com/2012/03/14/brin...

Here's a leftist UK think tank arguing for a 21 hour week.
http://www.neweconomics.org/publicat...

it would be a net gain for our society for sure, but it would harm (in some industries, gut) companies who have gotten very good at exploiting workforces. Any attempt to rectify it and would be dead in the water though.

At my job I just left we were moved from Exempt to Non-Exempt and it actually added a ton of pressure to the job environment. I was in publishing and we didn't control the workload and we had hard and fast deadlines. So when the work got heavy, we worked more, but when work got light, we worked less.

The entire time we were non-exempt we'd end up putting out crappier products because we had to fit, say, 60 hours of work into 40 hours of work. Not fun, and it would cause more problems down the line.

Exempt worked for us. We certainly weren't working 60+ hours every week, but we also weren't lucky enough to work 30 hours a week all the time, but it did happen.

garion333 wrote:

60 hours of work into 40 hours of work.

Isn't that supposed to indicate that you should hire more people (if a company is serious about being non-exempt)?

garion333 wrote:

At my job I just left we were moved from Exempt to Non-Exempt and it actually added a ton of pressure to the job environment. I was in publishing and we didn't control the workload and we had hard and fast deadlines. So when the work got heavy, we worked more, but when work got light, we worked less.

The entire time we were non-exempt we'd end up putting out crappier products because we had to fit, say, 60 hours of work into 40 hours of work. Not fun, and it would cause more problems down the line.

Exempt worked for us. We certainly weren't working 60+ hours every week, but we also weren't lucky enough to work 30 hours a week all the time, but it did happen.

I'm not so sure this is the fault of the change from exempt to non-exempt, so much as it is your ex-employer's lack of vision towards adjusting their goals and strategies to compensate properly.

It's not as though they could expect to make this change and not need to change anything else.

I think the exempt status has been abused, honestly. I currently have a job where I get paid hourly as a contractor, but I also get profit sharing, 401k, health insurance and vacation. It's the best of both worlds. It's going to take a lot to leave this job.

Seth wrote:

how does American productivity compare with German or other European productivity, who enjoy triple the vacation time and maybe 60% of the average work week?

I'll never forget the first time I went to Germany to visit my wife's family. Their standard of living blew me away!
Thirty-five hour work weeks, two hour lunches and six weeks of vacation to start. We're doing it wrong!

DanB wrote:
garion333 wrote:

60 hours of work into 40 hours of work.

Isn't that supposed to indicate that you should hire more people (if a company is serious about being non-exempt)?

Yes, but they're also cheap as s**t.

NSMike wrote:
garion333 wrote:

At my job I just left we were moved from Exempt to Non-Exempt and it actually added a ton of pressure to the job environment. I was in publishing and we didn't control the workload and we had hard and fast deadlines. So when the work got heavy, we worked more, but when work got light, we worked less.

The entire time we were non-exempt we'd end up putting out crappier products because we had to fit, say, 60 hours of work into 40 hours of work. Not fun, and it would cause more problems down the line.

Exempt worked for us. We certainly weren't working 60+ hours every week, but we also weren't lucky enough to work 30 hours a week all the time, but it did happen.

I'm not so sure this is the fault of the change from exempt to non-exempt, so much as it is your ex-employer's lack of vision towards adjusting their goals and strategies to compensate properly.

It's not as though they could expect to make this change and not need to change anything else.

The whole exempt/non-exempt thing came down from up on high as a lawsuit had been filed against them. Publishing isn't the only thing that the company does and we're a small part, so while it was shoving a square peg in a round hole for us that wasn't true of the entire company (of 15,000 or so employees).

That said, they did offer overtime, but it was always a joke because they'd give it to us last minute. But that's a whole different story.

Bear wrote:
Seth wrote:

how does American productivity compare with German or other European productivity, who enjoy triple the vacation time and maybe 60% of the average work week?

I'll never forget the first time I went to Germany to visit my wife's family. Their standard of living blew me away!
Thirty-five hour work weeks, two hour lunches and six weeks of vacation to start. We're doing it wrong!

Those damn socialist scum!

DanB wrote:

The whole basis of capitalism is to convert excessive productivity into profit for the owners/controllers of the means of production. And that's directly where the pressure to work longer comes from because the naive assumption (on the part of owners/controllers) is that the more hours you work the more you will produce.

Naive indeed. The studies on worker productivity began over 100 years ago, but even today we see articles like these.

Yeah making American labor even more expensive is sure to slow down outsourcing!

LeapingGnome wrote:

Yeah making American labor even more expensive is sure to slow down outsourcing!

Is that really a goal still? I figure it's past time to give up on trying to stop that, and find ways forward.

wordsmythe wrote:
LeapingGnome wrote:

Yeah making American labor even more expensive is sure to slow down outsourcing!

Is that really a goal still? I figure it's past time to give up on trying to stop that, and find ways forward.

At my aforementioned previous employer they started to bring some of the jobs back. Apparently laying off 1,200 employees or whatever it was resulted in a loss of knowledge. Shocking, I know.

"Well, we outsourced our production of widgets to China!"

"Wow, these widgets aren't very good. Let's get Bob to troubleshoot."

"Bob?"

"Oh, crap."

I don't understand the problem. I thought the answer is always "the market will correct itself"?

Well, it is correcting itself. Some skilled labor is returning, because it actually needs to be skilled. Lots of the rest of it is staying in China, because the Chinese workers are good enough, and much cheaper.

In the ancient times, "Non-Exempt" meant that your skills are a commodity, but you're paid overtime, and "Exempt" meant that you're a specialist, you're not being paid overtime, but you're getting a bonus at the end of the year. Now, at least in IT, the knowledge workers are treated as a commodity too. And there are no more bonuses of old for the rank-and-file. So we are kind of getting the worst of both worlds.

bandit0013 wrote:

The science backs it up over and over again, yet we keep doing it.

Science backs up a lot of things, yet people continue to willfully ignore those as well.

Malor wrote:

Well, it is correcting itself. Some skilled labor is returning, because it actually needs to be skilled. Lots of the rest of it is staying in China, because the Chinese workers are good enough, and much cheaper.

Ehhh...there have been several studies over the past several years that would refute this. The situation is that the job market is demanding increasingly technically inclined workers, yet fewer and fewer students are majoring in the sciences.

http://www.tapcoalition.org/resource...

http://www.uic.edu/home/Chancellor/r...

In a nutshell: we need more STEM educated workers, but students are not majoring in STEM majors, or getting STEM certifications if they don't go to college.

I'm reminded of a quote I heard a few years back, I forget exactly where, but it goes something like this:

Immigrants worked their fingers to the bones in manual labor so their kids could go to college and be doctors and lawyers. These children of immigrants worked long hours as doctors and lawyers so their kids could go to college and drink beer and snowboard.

nel e nel wrote:
Malor wrote:

Well, it is correcting itself. Some skilled labor is returning, because it actually needs to be skilled. Lots of the rest of it is staying in China, because the Chinese workers are good enough, and much cheaper.

Ehhh...there have been several studies over the past several years that would refute this. The situation is that the job market is demanding increasingly technically inclined workers, yet fewer and fewer students are majoring in the sciences.

At least in the IT field, the number of students majoring in anything IT-related is almost completely irrelevant to the supply of skilled workers. Few students coming out of college know a damn thing that's useful in IT - unless they learned it themselves on their own time. I would argue that this is true across a lot of fields, as educational standards continue declining due to effects of government schooling, tuition subsidies/inflation, and an increasing focus on sports and prestige instead of useful academics.

I could write a small essay on my experience (and that of my peers) as a STEM major and graduate, but the reality is that there are many causes. Societal pressure, constructive punishment of students, failures of the market, failures of the education system, failures of society/parenting, and more. I don't blame schools any more or less than I blame the companies that refuse to hire inexperienced workers and train them.

Kraint wrote:

I could write a small essay on my experience (and that of my peers) as a STEM major and graduate, but the reality is that there are many causes. Societal pressure, constructive punishment of students, failures of the market, failures of the education system, failures of society/parenting, and more. I don't blame schools any more or less than I blame the companies that refuse to hire inexperienced workers and train them.

Oh yeah, totally agree with all of this, and what Aetius wrote as well. It's tough, because training a newbie is expensive, but in order to get that experience you need to work. One of those catch-22s in life that are so frustrating. There have been a lot of steps taken by various industries to create partnerships with local universities to implement more professional development, and get students thinking in terms of 'how will the skills I learn in this major translate into the workplace' instead of 'I just want to study what I'm passionate about and worry about a job when I graduate'. But that gets into the prejudice of higher academia towards working in industry as versus in academia, which is a whole other thread.

nel e nel wrote:
Kraint wrote:

I could write a small essay on my experience (and that of my peers) as a STEM major and graduate, but the reality is that there are many causes. Societal pressure, constructive punishment of students, failures of the market, failures of the education system, failures of society/parenting, and more. I don't blame schools any more or less than I blame the companies that refuse to hire inexperienced workers and train them.

Oh yeah, totally agree with all of this, and what Aetius wrote as well. It's tough, because training a newbie is expensive, but in order to get that experience you need to work. One of those catch-22s in life that are so frustrating. There have been a lot of steps taken by various industries to create partnerships with local universities to implement more professional development, and get students thinking in terms of 'how will the skills I learn in this major translate into the workplace' instead of 'I just want to study what I'm passionate about and worry about a job when I graduate'. But that gets into the prejudice of higher academia towards working in industry as versus in academia, which is a whole other thread.

A lot of IT is a mix between art and science. It should be a freaking guild.

bandit0013 wrote:
nel e nel wrote:
Kraint wrote:

I could write a small essay on my experience (and that of my peers) as a STEM major and graduate, but the reality is that there are many causes. Societal pressure, constructive punishment of students, failures of the market, failures of the education system, failures of society/parenting, and more. I don't blame schools any more or less than I blame the companies that refuse to hire inexperienced workers and train them.

Oh yeah, totally agree with all of this, and what Aetius wrote as well. It's tough, because training a newbie is expensive, but in order to get that experience you need to work. One of those catch-22s in life that are so frustrating. There have been a lot of steps taken by various industries to create partnerships with local universities to implement more professional development, and get students thinking in terms of 'how will the skills I learn in this major translate into the workplace' instead of 'I just want to study what I'm passionate about and worry about a job when I graduate'. But that gets into the prejudice of higher academia towards working in industry as versus in academia, which is a whole other thread.

A lot of IT is a mix between art and science. It should be a freaking guild.

Yeah, or at the very least changed to an apprentice-based system along similar lines as an electrician.

Go ahead and try to unionize IT. Give it a go.

If no one is a manager who will demand your TPS reports?

wordsmythe wrote:

Go ahead and try to unionize IT. Give it a go.

My buddy worked as a mainframe programmer for UPS. Their IT was unionized. Up until the point they outsourced their mainframe operations to IBM in India in 2008.

wordsmythe wrote:

Go ahead and try to unionize IT. Give it a go.

No need to go all uniony with everything that entails. Just remove the exempt status and let everything else work itself out.