is being salaried a scam? — Ask a Manager
A reader writes:
I’m at the highest hourly position in my company. Most upward mobility for me at this point is becoming salaried, and as I’ve explored it, I am perplexed.
As an hourly employee, I’m generally not working more than 42 hours on any given week. I get two 15-minute breaks and a half hour lunch. I have the luxury of logging off and not having to think about work for the rest of the day. And of course, overtime!
For most salaried people at my company who I’ve spoken to, it sounds like the norm is minimum 45-hour weeks, with bad weeks being as much as 60 hours. Getting breaks or lunches seems rare, if it happens at all, and work can bleed into other areas of your life. And honestly, knowing my company’s pay structure, switching to salaried would be a pay cut due to the loss of overtime pay. I know there’s theoretically a benefit of flexibility, but I get all the flexibility I need in my current job.
Seeing the comparison, I don’t understand why anyone would go for salaried positions! I would be miserable with that set-up — I need to be able to step away from work throughout the day, and the occasional 9-10 hour day is exhausting to me. And I have friends! And hobbies! I want to have energy for those things.
Is my company an outlier with these salaried working conditions? Is there some obvious benefit I’m missing? Am I unusual for needing breaks and being exhausted when working more than 40 hours a week? What am I missing?
Ah, you have asked the key question of modern work — a question that is sitting in plain view begging people to look at it but still doesn’t get asked enough.
Being salaried is often a scam.
Not always. It depends on how a company implements it. But often.
First, let’s clarify some terms. What you’re really talking about is being exempt. In the U.S., all workers are classified as exempt or non-exempt. Non-exempt workers must be paid overtime (time and a half) for any hours over 40 they work in a single week. Exempt workers are exempt from overtime requirements, but must be paid the same salary every week. Your classification isn’t up to your employer; it’s governed by federal regulations. To be exempt, you must earn a salary of at least $35,568 and perform relatively high-level work as your primary duties. (There’s a more detailed explanation here.) People often use “salaried” to mean exempt, but you can be salaried non-exempt too (meaning you get the same salary week to week but you also get overtime time). So although you said “salaried” in your letter, you’re really talking about being exempt.
The way it’s supposed to work is if you’re salaried/exempt, you’re getting paid to do a job, not for a specific number of hours. So if you work 45 hours one week and 36 hours the next, that’s supposed to be okay.
And some places work like that, and when they do it’s mostly fine. When you have that kind of trade-off, that flexibility is a benefit.
But at a lot of places, that flexibility is much more one-way. You’re expected to work the company’s standard business hours at a minimum, plus any additional time it takes to get your job done. If you have to work 45 hours one week, that’s just what’s expected of salaried workers. But if you work 36 hours the next week, you’re going to be charged four hours of PTO (or you’re going to get weird looks and questions about why you left at 1 pm on Friday).
In those companies, “you’re paid for the job, not the hours” only goes one way, and it’s in the company’s favor, not yours. They don’t see those 45 hours as anything extra, but they sure do see those 36 hours as less than what you owe. At those places, being salaried/exempt just means you work more hours without being compensated for them.
That’s not to say there aren’t still other advantages to being exempt. Often when you’re exempt, you have more flexibility in your day. You often don’t need to track your lunch or other breaks with the same rigidity and/or have more control over when you take those breaks. (Although a lot of salaried people do fill out timesheets in order to bill clients, track resources allocated to particular projects, or track PTO.) Generally, if you take a call from your spouse or check the news now and then, it shouldn’t be a big deal because there’s not as much focus on “you are being paid to work during this specific time, right now.” (It shouldn’t be a huge deal in many non-exempt jobs either, but in reality it can have a different feel.)
But are those advantages enough to make up for potentially working very long weeks and not receiving overtime pay?
I’d argue no.
I don’t want to overstate the case. A lot of people do like being exempt and have companies that handle it fairly — giving back as much flexibility as they expect to receive from employees. But there are a lot of companies that don’t.
And some people feel like there’s an increased status to being exempt, that it’s somehow more professional. Think about that: We’ve convinced people there’s status to not getting paid more when they work more. We’d do well as a society to move away from that.