Salaried or Hourly: Professionalism vs. Profit Margin?

This past April the Joint Government Affairs Committee met during the spring conference of the American Congress on Surveying and Mapping (ACSM). A proposal to amend the Fair Labor Standards Act of 1938 (Title 29 of the US Code, Section 213) had been presented in January as Senate Bill 237 to "clarify the exemption from the minimum wage and overtime requirements of that Act for certain construction engineering and design professionals." As I write this article in early June, this proposal is under review by the Committee on Health, Education, Labor, and Pensions. The proposal is available through the Library of Congress website (http://thomas.loc.gov/home/thomas.htm), but since this only provides the proposed amendments to the current Fair Labor Standards Act, the full context of the existing law should be read to better understand the implications of these changes. 29 USC 213 is available online through the Government Printing Office (http://www.access.gpo.gov), and the language that would newly affect construction engineering and design professionals is in subsection 213(a)(1), describing current exemptions from minimum wage and maximum hour requirements for "any employee employed in a bona fide executive, administrative, or professional capacity."

 

Who Will Be Affected?
Discussion about S.237 during the ACSM meeting revealed a range of concerns on behalf of employees who might be affected by the amendments if they become law. Worries focused on exploitation of personnel by classifying them as salaried instead of hourly, thereby saving the employer dollars while the staff works more hours for a set rate instead of at overtime wages. Don't think this does not happen. I once worked as a manager in an office where the owner asked me if it wouldn't be a better idea to make certain members of my staff salaried instead of hourly. His argument was that it would make those staff members "feel more professional" because they would no longer have to keep a time card. My response was that professionalism is related to pride in one's work, not a time card, and that working more hours for a static rate of pay in no way represented professional treatment of those upon whom the company's reputation rested. I was also aware of the financial dependence of some staff upon those overtime dollars to supplement family incomes, but that was rephrased in my voiced argument.

The definition of "professional" in S.237 newly includes "any employee providing professional consulting services recognized by a 4-year degree or greater, professional licensure, professional certification, or at least eight years of similar work experience." Among responsibilities of these legally defined professionals are "interpretation and adherence to design documents…supervision during a project…interpretation of contract requirements through analysis of specifications and drawings…" and several other work aspects that many people recognize as part of their regular business. Land and hydrographic surveying are specifically included in the design professions affected.

Compensatory Time or Overtime Pay?
Concurrent with S.237 is S.317, proposing to expand 29 USC 207 (regarding maximum hours for hourly staff) beyond employees of public agencies, allowing private companies to decide whether or not to offer compensatory time instead of overtime pay, while allowing the employee rather than the employer decide whether time or dollars is the acceptable compensation. Both compensatory time and overtime pay are to be paid at a rate of at least 1 1/2 times the number of extra hours worked, so that eight hours of extra work is equivalent to either twelve hours of pay or twelve hours of compensatory time. Employees would not be permitted by this legislation to accrue more than 160 hours of compensatory time without being paid, meaning that unused compensatory time cannot roll over to the next year and must be paid in cash at the end of the year. Employees are to have the ability to choose when they take their compensatory time, as long as it does not "unduly disrupt" business. Beware of subjective determination: the only way I could use my compensatory time in one firm was to substitute it for sick leave when I was hospitalized for eight days. Union contracts and individual contracts can supersede any of these provisions.

Lest there be concern that design professionals are being singled out for identification as "professional" and thus exempt from the provisions of S.317, note that there are also proposals to amend the Fair Labor Standards Act to cover such professions as funeral directors and licensed embalmers, and also "certain computer professionals." This last category should be of interest, however, since the personnel affected would be "any employee who is a computer systems, network, or database analyst, designer, developer, programmer, software engineer, or other similarly skilled worker…whose primary duty" includes rather broadly defined duties relating to those titles. Currently these employees are considered to be working "in a professional capacity" and thus exempt from overtime payment and maximum hour limits, unless they are paid an hourly rate of less than $27.83 (29 USC 213(a)(16)). This amendment has started its way through the House of Representatives as H.R. 1996, having passed the Senate as S.395.

The newspapers are presently noticing these bills, and so pressure on legislators, both for and against, is likely to be high. ACSM has been told that S.237 would not expand the class of people who are exempt from overtime and that it does not affect state law. No matter the outcome, however, the best decision is to earn and keep the respect and trust of those who work with us by treating them professionally and compensating them appropriately for the services they provide us. This means that we don't create arbitrary "professional" classifications just to save a few dollars for the firm. It means that we do acknowledge the individuals behind our completed projects and that we do not treat them as statistics to juggle on our ledgers. It means that we don't force people to take compensatory time rather than overtime pay, or to take their time off when it is more convenient for the company and less acceptable to the employee. When we allow our employees true flexibility to balance work and personal life, everyone wins.

About the Author

  • Wendy Lathrop, LS
    Wendy is licensed in four Eastern states, and is a professional planner in New Jersey. She is also a Contributing Writer for the magazine.

» Back to our September 2003 Issue

Website design and hosting provided by 270net Technologies in Frederick, Maryland.