Employmentfilter: Mandatory overtime for a salaried position - can it be required?

February 23, 2006 11:08 AM

Quick question for those of you with any knowledge of the subject: Is it possible (by possible I mean legal) for an employer to change the pay structure for an employee from salaried but eligible for overtime pay to a salaried but not eligible for overtime? This is a case where working overtime is required by the job. This is in Illinois.

Someone I am close to has been working for a large manufacturer of edible oils for many years. He just received word that management is going to be coming through department by department and instituting changes to the pay structure of employees. Specifically, they are going to eliminate eligibility for overtime payment, but a requirement to work overtime will still exist.

If this is the case, the person would effectively lose roughly $30,000/year in wages, because in a typical week they work 20-30 hours of overtime.

Is this really possible?

posted by mockjovial to Work & Money (14 answers total)

It is a complicated question, governed by federal law. Specificall, the Fair Labor Standards Act
posted by Lame_username at 11:13 AM on February 23, 2006

I am not a lawyer although I would be willing to bet it "will be" legal by the time management is finished with the transition. If the company is large and has a good legal department, it will most likely be legal. Good luck... Just curious, are you "at will" employee's?
posted by orlin at 11:29 AM on February 23, 2006

God I hope they're at will. I hate Salary. It has been a bane to my existance sense I took it. I work 60-70 hours a week, and my salary covers 50 hours of it. All manditory, of course.

I honestly didn't even know that there WERE overtime for salaried people.

But yeah, I too think it'll be legal. Even small companys usualy arn't that dumb.
posted by TrueVox at 11:48 AM on February 23, 2006

It's still worth checking out. The Exempt v non-exempt statuses are abused constantly here in California. In my (anecdotal) experience the company is often in the legal wrong. Whether you want to fight it or not is another story.
posted by small_ruminant at 12:03 PM on February 23, 2006

for $30k/year the guy should definitely consult with a local attorney.
posted by delmoi at 12:36 PM on February 23, 2006

It is well worth talking to a labor attorney. FLSA provides that employers pay attorney's fees if they lose. Companies get this wrong very often and a good employment lawyer can determine the strength of the case pretty easily. I would make sure that they practice employment law, if it was my case. NELA is a good place to start looking.
posted by Lame_username at 12:53 PM on February 23, 2006

mockjovial, please email me (email in profile). I don't know the answer to your question, but I have some connections to employment lawyers in Illinois (even better if you're in Chicago) and I might be able to direct your friend to someone who can help.
posted by jennyb at 12:58 PM on February 23, 2006

Your friend isn't in a union, is he? If so, there might be some recourse there.
posted by jennyb at 12:59 PM on February 23, 2006

Overtime has recently gotten a beating due to recent legislation. Whether or not the company has to pay him overtime rests alot what his job and job title are. The Fair Pay site and the Overtime section of the DOL's website should answer most questions.

He can also call the local Wage & Hour office to answer alot of questions and/or to report the business if they are breaking the rules.
posted by Ateo Fiel at 1:11 PM on February 23, 2006

There are two separate questions here. The first is the one you asked: can the company change the compensation structure to stop paying for overtime? The answer is almost certainly yes, unless the employees are covered by a collective bargaining agreement or an employment contract.

The second question is more complicated - does the company have to pay for overtime? These rules changed in 2004. Employees earning less than $455 per week now have to be paid overtime regardless of position. Other employees have to be paid for overtime unless their job falls under one of the five exemptions under Sections 13(a)(1) and 13(a)(17) of the FLSA for for executive, administrative, professional, computer, and outside sales employees.

Illinois employers are also governed by the Illinois Minimum Wage Law. In general, Illinois law follows the FLSA, but there are some additional categories of exempt employees.
posted by fochsenhirt at 1:13 PM on February 23, 2006

Whether or not the company has to pay him overtime rests alot what his job and job title are.

Actually, job titles are irrelevant. From the FairPlay site:

Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the Department’s regulations.

What is important is (a) how much your friend earns, (b) how many employees his employer has and the company's annual sales and (c) what his actual job duties are.
posted by fochsenhirt at 1:17 PM on February 23, 2006

I'd be very interested in some statistics on how often challenges to this often-abused standard succeed. I'm inclined to think it's usually unwinnable, unfortunately.

I'd try to get the enforcement agencies to contact the employer to discuss the probable issue rather than going up against them as an employee; confronting them as a concerned wage-earner strikes me as a one-way ticket to unemployment for "unrelated" issues.
posted by phearlez at 1:37 PM on February 23, 2006

Truevox -- I was "at will" and salary. That's why I asked -- they porked us...
posted by orlin at 4:06 PM on February 23, 2006

Talk to your union.
posted by robcorr at 7:57 PM on February 23, 2006