The FLSA OT Exemption No Longer Computes!

When the DOL enacted the FLSA back in 1938 there were a couple of things that could not have been taken into account.  The whole basis for the overtime exemption was that certain employees were educated, trained, and responsible at a level that afforded a certain flexibility in how they get their job done.  Generally the argument was that sometimes those professionals would work 40 hours a week, sometimes they would work 45, and sometimes they would work 35.  Whatever it was, though, the expectation was that their annual salary should take into account the level of effort – and the time on task – required by the role. 

Well the times have changed and this exemption as originally designed is losing its applicability…entirely.  As an example (one that you all can identify with) I have a Blackberry on my person at all hours – in fact, it’s on my bedside table when I go to sleep.  It’s the first thing I look at when I wake up, the last thing I look at before I go to bed.  Yes, that’s sad…and mostly it’s my fault.  BUT…there is some Employer culpability here.  Employers have grown to assume – almost by accident – that the average managerial or executive level employee will be available and on-call 24/7.  This applies, by the way, even when one is on vacation.  I don’t think I’ve truly disconnected from the office on a vacation – like leave the computer and smart device at home – since our honeymoon back in 2001.  Seriously. 

My annual base salary is fair and market competitive, but if I were to calculate an hourly rate based on hours worked I can guarantee you it doesn’t come close to what it is designed to be.  See if you can follow me here…  Let’s assume: a) over the last five years smart devices have become widely adopted and used as a business tool, b) said smart device usage has resulted in, on average, an additional 1.25 hours of work every week every year over those last five years (a conservative estimate I’d say), c) annual base salaries have increased, on average, by 3% every year over the last five years.  If you can buy into these assumptions, then you better sit down.  You’re really only making .26% (yes, less than 1%) more than you were 5 years ago! 

 

So, Mr. DOL, I hereby propose that you amend the current exemption to read, “Should you require an exempt employee to carry a smart device so that he or she can access job related eMails and/or phone calls outside of the office, employer must also pay said exempt employee an “on-call” rate above and beyond their annual base salary.  The on-call rate should approximate 1/4 of their regular base hourly rate and should be paid for all waking hours outside of the workplace.  If employee is also required to remain on-call during scheduled and approved vacation, employer shall increase the on-call rate to 1/2 of their regular base hourly rate.”  So if you’re on board with this approach, contact your respective congressmen and let them know.  I say it’s time the market be forced to adjust to what has very nearly become free labor.