Is Our Definition of Overtime Absurdly Low?

For those of us who've earned salaries in creative fields, the thought of overtime pay is often looked at as a pipe dream.

Although Federal Law requires workers to be paid time-and-a-half after 40 hours, workers classified in executive or professional roles are excluded if they earn more than $23,600 per year.

Is this fair? Americans don't seem to think so.

A recent Public Policing Polling found 65% of Americans would support mandatory overtime pay for workers earning up to $75,000 per year. If this became a reality, 84% of the workforce would be eligible for overtime pay, but currently only 11% qualifies.

Last month, the Obama administration submitted a proposal to expand the number of workers who are eligible for overtime pay. This reform could result in a pay bump for millions of workers, but the results won't be made public for several weeks.

Early Mistakes

Overtime pay? I probably would have laughed if you asked me about it 3 years ago.

For most of my career, I worked as many hours as possible and tried not to think about my hourly rate. If someone asked about being compensated for extra hours through overtime pay or comp time, I quickly changed the subject.

Meanwhile, I couldn't help but notice friends enjoying happy hour cocktails or beer Fridays at the end of their work weeks. Was working through my weekends really worth it?

It probably didn't surprise anyone when I got burnt out and eventually quit my job. However, it took a recent hourly side hustle to highlight the importance of protecting my time.

Reducing Your Hourly Rate

Ready for a wake-up call? Divide the hours you're working per pay period by the amount you see in your paycheck.

How does that hourly rate make you feel? Are you being fairly compensated?

The truth is, you're reducing your hourly rate by working unpaid extra hours. Think about the opportunity cost. Would your time be better spent on a side hustle, at the gym, or with loved ones?

Your time has value, and you're the only one who's going to fight to protect that value.

Manage Expectations

The easiest way to avoid being overworked is to communicate during the hiring process. Ask specific questions about their expectations and be clear about your needs.

– How many hours will you be expected to work per week?
– What does a typical day in this role look like?
– What's the company's vacation policy and will you be encouraged to fully disconnect?
– Does the company value work-life balance?

I've had these conversations during the hiring process of all of my previous jobs, but made the mistake of overestimating my energy levels, desire for downtime, and how many hours I was willing to put in.

Work Smarter, Not Harder

If you're trapped in an environment of non-stop work, there may still be ways to maintain your hourly rate. How? Working smarter.

This isn't always easy, but I've experimented with technology to try and find new ways to save time. Introducing productivity apps into my daily life has saved me countless hours every week.

Some of my favorites?

Trello – to do list
IFTTT & Zapier – task management
Mailbox & Unroll.me – email
Slack – team communication
Buffer, Hootsuite, TweetDeck, Mention, Cyfe – social media and brand monitoring
Headspace – meditation
Tripit – travel management

What apps do you rely on to work smarter?

Long-Term Solutions

While many companies are skirting overtime pay laws by unfairly classifying workers as executive or management, employees must take responsibility for themselves. Asking questions during the hiring process and managing expectations from the beginning is crucial.

It's unclear whether the administration's recent proposal will pass, and if it does, it still would not cover all workers. Senate Democrats have recommended a salary threshold of $56,680 and House Democrats have suggested $69,000.

In the meantime, I'll continue working to protect my hourly rate by working smarter. My time has become more valuable as I've grown older. And I'm just not willing to part with it as easily.

Readers: Is Our Definition of Overtime Absurdly Low?

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Discussions — 10 Responses

  • NZ Muse June 8, 2015 on 5:24 am

    As a jouurnalist I opted to be hourly and part of the union rather than salaried. It was definitely the smart decision. Overtime rates, double time on weekends and the late shift.

    I’ve been salaried since however the hours have been a lot more regular. I pretty much never need to work beyond my normal hours at this job.

    Reply
  • MyMoneyDesign June 8, 2015 on 5:50 am

    I’m in the U.S. and my colleagues across the lake in Canada (who do the same job as me) get overtime beyond 40 even though they are also salary also. I would LOVE some overtime. Let’s get back to the Henry Ford mantra: A fair wage for a fair day’s work.

    Reply
  • Ali @ Anything You Want June 8, 2015 on 9:47 am

    I think the key here is as you’ve said – work smarter, not harder. Even when you’re doing something you love (and maybe especially), it is easy to let it take over too many hours of your life. Life should be about balance, and you need to be strategic about how you use your time to achieve that balance.

    Reply
  • Jacob June 8, 2015 on 2:29 pm

    I would support that bill, should it be placed on the voting table. I’m one who does believe that America works far too much and generally has a terrible work/life balance.

    Reply
  • Sylvia @Professional Girl June 9, 2015 on 10:02 am

    I am not in the US but I do believe you should be paid for the work you do. So many companies forget about employee appreciation is linked to productivity. And there are options, they pay overtime or give you perks.

    I am salaried and get paid time and a half for overtime on weekdays and double for weekends. I haven’t had to work overtime yet, but if I had to I would be much happier to do it. On the other hand, my brother is a salaried working and doesn’t get overtime but his company pays all of his deductions for him. So his gross equals his net. To me both options are a win!

    Reply
  • Retire29 June 9, 2015 on 11:09 am

    I think that America is actually on the cutting edge when it comes to overtime mentality. The idea that we’ve structured work perfectly to fit into 40-hour weeks is absurb. Some weeks, a big project necessitates 80 hours. Other weeks, you’re ridin the pine for 20 hours with nothin to do.

    This is the whole point of an exempt, salaried employee construct. From an employer’s perspective, I’m going to pay somebody based on the value I’ll get from them over a whole year, not pay them a high baseline week-in, week-out, then when I need them for a bit extra, I have to pay extra.

    Overtime, except for entry-level and contract work, sounds like a European, semi-socialist concept.

    Reply
  • Tre June 10, 2015 on 5:42 am

    I’ve been thinking about that a lot now. How much of a pay decrease would I take to work less than 40 hours per week? I currently work more than 50. I always relate it back to how much do I need to earn to live our dream life? If we can live our dream life and I can work less than 40 hours per week, what else is there to want?

    Reply
  • Karen June 10, 2015 on 12:52 pm

    My job is salaried and I get overtime. Time and a half on holidays and double time and a half if we work more than 7.5 hrs on the holiday. I think it would be hard for me to take on a job in which I wasn’t compensated. I can get by without the extra pay cheque, but it’s always nice to have that extra cash.

    I also use Buffer as a timesaver for scheduling tweets.

    Reply
  • Erik July 14, 2015 on 3:02 pm

    Thanks for the article.

    I agree and I disagree. While most places will require one to work more than 40 hours a week to get a project done, down the road they will be compensated for it. For example, consider an auditor. During busy season, they might be working 100 hour weeks. During non-busy season it will be down to 40 hours. However, once you have a few years of experience, you are easily pulling down 6 figures. So is it worth it or not? That’s the question and one that you address. Is it worth having time to spend with friends and family or is money more important?

    Reply
    • Kate Dore Erik July 14, 2015 on 7:56 pm

      Thanks for commenting and sharing your point of view, Erik! I definitely agree that salaried employees can receive additional compensation, but don’t always do. It depends on a lot of factors. And you’re right. At a certain point most people have to prioritize their time. For me, time became more important.

      Reply