Help Me Understand if the New Federal Overtime Wage Law Applies to Me
October 29, 2016 7:48 AM Subscribe
I am employed by a travel company as a tour manager. I am considered by the company to be a "full time employee" which means I get guaranteed 26 weeks of work, 2 weeks paid vacation and health insurance . On Monday we have a mandatory conference call with the head of HR and I would like to be prepared to ask the right questions. More detail inside.
Base pay is $500 per week, regardless of number of hours worked in total over the 7 day period. Our "paid week" starts on the Monday of the week the tour starts and ends on Sunday. If the tour starts on Tuesday and ends on the following Wednesday we get paid for 2 weeks.
Sometimes this system works in the tour managers favor and the dates of a tour fall so that we get paid 2 weeks for a 7 day tour, but more often we are working 10-14 days with 2 weeks pay. And basically on tour you are are not working 8 hour days. You are "on call" 24/7. Also, most tours your day starts at 7am and doesn't end until 8 or 9 pm. Also, none of the time spent on preparing for the tour, doing mandatory vendor confirmations, etc, is factored in or compensated. Nor are we compensated for time spent after the tour officially ends doing accounting paperwork.
We are not managers in the sense that we manage other employees. We do not fall under the "professional" category. We do make tips and the company is very clear that's where they expect us to earn the majority of our income. I have long felt we are being ripped off by this system. This blanket base pay doesn't begin to compensate for the number of hours we put in.
I have read up on the new ruling, but cannot find any info as it relates to the tour industry. Any help with assessing my situation in particular would be much appreciated. Or links to articles that might help explain whether or not the tour industry is subject to the new rules.
I think the new law might help tour managers get better pay, but I don't want to assume. I really want to go in to this meeting well prepared. ((Side note: one reason our pay is so low is that the tour company i work for receives 2000 applications a year for 100-200 TM positions. If we grumble about pay, we get shown the door. Experience means nothing. We are too easily replaced.))
Base pay is $500 per week, regardless of number of hours worked in total over the 7 day period. Our "paid week" starts on the Monday of the week the tour starts and ends on Sunday. If the tour starts on Tuesday and ends on the following Wednesday we get paid for 2 weeks.
Sometimes this system works in the tour managers favor and the dates of a tour fall so that we get paid 2 weeks for a 7 day tour, but more often we are working 10-14 days with 2 weeks pay. And basically on tour you are are not working 8 hour days. You are "on call" 24/7. Also, most tours your day starts at 7am and doesn't end until 8 or 9 pm. Also, none of the time spent on preparing for the tour, doing mandatory vendor confirmations, etc, is factored in or compensated. Nor are we compensated for time spent after the tour officially ends doing accounting paperwork.
We are not managers in the sense that we manage other employees. We do not fall under the "professional" category. We do make tips and the company is very clear that's where they expect us to earn the majority of our income. I have long felt we are being ripped off by this system. This blanket base pay doesn't begin to compensate for the number of hours we put in.
I have read up on the new ruling, but cannot find any info as it relates to the tour industry. Any help with assessing my situation in particular would be much appreciated. Or links to articles that might help explain whether or not the tour industry is subject to the new rules.
I think the new law might help tour managers get better pay, but I don't want to assume. I really want to go in to this meeting well prepared. ((Side note: one reason our pay is so low is that the tour company i work for receives 2000 applications a year for 100-200 TM positions. If we grumble about pay, we get shown the door. Experience means nothing. We are too easily replaced.))
How much do you make in tips - does that bring you up to $913/week?
posted by the agents of KAOS at 1:14 PM on October 29, 2016
posted by the agents of KAOS at 1:14 PM on October 29, 2016
I wish I had a better answer for you, but after a ton of googling, I'm still not completely sure what the tour industry will need to do to be compliant with the law and be profitable. I'm a former tour manager myself, 10 years with a well known company, but left the industry before overtime was an issue.
The best I could find to help you out are links to two articles, that might be tangentially related. Me mail me for the links as I couldn't get them to link here.
From everything I can find, tour operators in the past have resisted changing the classification of tour managers to non- exempt. It's seems though when employees take them to court on the matter, judges have agreed that the employees are non exempt and due overtime pay. I found records actually of a class action suit against the company I used to work for, and no record of a verdict. My guess is they settled the suit.
Good luck on your conference call. If your company is anything like mine was, you may want to approach disagreements very strategically rather than showing your hand on a conference call.
posted by Rapunzel1111 at 1:51 PM on October 29, 2016
The best I could find to help you out are links to two articles, that might be tangentially related. Me mail me for the links as I couldn't get them to link here.
From everything I can find, tour operators in the past have resisted changing the classification of tour managers to non- exempt. It's seems though when employees take them to court on the matter, judges have agreed that the employees are non exempt and due overtime pay. I found records actually of a class action suit against the company I used to work for, and no record of a verdict. My guess is they settled the suit.
Good luck on your conference call. If your company is anything like mine was, you may want to approach disagreements very strategically rather than showing your hand on a conference call.
posted by Rapunzel1111 at 1:51 PM on October 29, 2016
none of the time spent on preparing for the tour, doing mandatory vendor confirmations, etc, is factored in or compensated. Nor are we compensated for time spent after the tour officially ends doing accounting paperwork.
This is illegal - if you're required to do it for the job, they're required to pay you for that time. There are a number of industries that pull this, and when they wind up getting dragged to court, the court almost always sides with the employee.
As mentioned, if the tips put you over $913/week, you're exempt--if you make that much average per week, for the quarter. If tips are low for a couple of weeks and that drops the average down to $900, they have to pay overtime. Relying on $413 in tips every week, per employee, sounds like a very foolish plan for avoiding overtime.
The new overtime law is meant to stop exactly the kind of situation you're in - employers who want to pay a flat rate or lump sum without keeping track of hours worked. You can expect to see a lot of businesses attempt to challenge the law with either "we can't keep track of the hours" or "we'd go out of business;" the answers are going to be "find a way... I'm sure your employees have phones with stopwatch apps, and if they don't, you may have to buy them" and "then you go out of business because you've got a business plan that involves not paying your employees what they're owed."
On-call time isn't automatically on the clock; there's some flexibility that hinges on both how often it's activated and how much of your personal time you're supposed to forfeit when a call situation happens. I expect there are some laws set up for "on-site 24/7" settings that aren't "8 at regular, 4 at x1.5, 12 at double pay" for the whole time--but tour companies may have to star being a lot more detailed about what counts as off-the-clock down time in the field. Getting Paid for Not Working goes into on-site & on-call work a bit:
posted by ErisLordFreedom at 7:31 PM on October 29, 2016 [2 favorites]
This is illegal - if you're required to do it for the job, they're required to pay you for that time. There are a number of industries that pull this, and when they wind up getting dragged to court, the court almost always sides with the employee.
As mentioned, if the tips put you over $913/week, you're exempt--if you make that much average per week, for the quarter. If tips are low for a couple of weeks and that drops the average down to $900, they have to pay overtime. Relying on $413 in tips every week, per employee, sounds like a very foolish plan for avoiding overtime.
The new overtime law is meant to stop exactly the kind of situation you're in - employers who want to pay a flat rate or lump sum without keeping track of hours worked. You can expect to see a lot of businesses attempt to challenge the law with either "we can't keep track of the hours" or "we'd go out of business;" the answers are going to be "find a way... I'm sure your employees have phones with stopwatch apps, and if they don't, you may have to buy them" and "then you go out of business because you've got a business plan that involves not paying your employees what they're owed."
On-call time isn't automatically on the clock; there's some flexibility that hinges on both how often it's activated and how much of your personal time you're supposed to forfeit when a call situation happens. I expect there are some laws set up for "on-site 24/7" settings that aren't "8 at regular, 4 at x1.5, 12 at double pay" for the whole time--but tour companies may have to star being a lot more detailed about what counts as off-the-clock down time in the field. Getting Paid for Not Working goes into on-site & on-call work a bit:
Now suppose that Frank is scheduled to work 3 days on, 3 days off. During the 72 hours Frank is on shift, his employer furnishes a cot and agrees that Frank will sleep for 8 hours each day starting at 12 am and running until 8 am. Frank gets his full night of sleep for the first two 24-hour shifts, but is constantly running around for his employer during the last night of his shift and gets only 4 hours of sleep. For the first two days, Frank will receive wages for 16 hours per shift. However, for the last 24-hour leg of his shift, Frank will be paid for the entire 24 hours because he could not get more than 5 hours of sleep.I am hoping to see the next wave of labor crackdowns aimed at unpaid internships.
...if you are employed as a limo driver and regularly are told to go wait at the local airport to pick up high-paying customers, you would probably get paid for time spent sitting around at the airport waiting for flights to come in.
posted by ErisLordFreedom at 7:31 PM on October 29, 2016 [2 favorites]
This thread is closed to new comments.
Your employer has three choices to remain in compliance:
1. Raise your pay to $913 per week. This will allow them to continue paying you in the way they do now (i.e. not tracking hours, not paying overtime when you work over 40 hours per week).
2. Cap your hours at 40 hours per week (at current salary). Seems impractical.
3. Track your hours and pay time and a half for overtime (hour over 40 per week), while keeping base salary as it is.
From what you've said, it seems like your employer will opt for 1 or 3, whichever it thinks will be cheaper. You may want to speak to some other tour managers for your employer to make sure you are on the same page. The new law is very clear and if your HR department is at all professional, they will comply in one of the three ways mentioned above. If they are not doing this, you should contact your state department of labor.
Since you are essentially "on call" while you are sleeping, you are technically on the clock. You can read about that on this DoL factsheet but the crux is that you are asleep at the worksite not at home, and you are therefore working.
posted by cushie at 8:17 AM on October 29, 2016 [4 favorites]