All the move did was adjust the income range to 1975 levels. The law has not kept up with inflation.

Now to get long winded.

First, presidential over-reach? B---S---! The power to have the executive branch set the number is Federal law, the last time it was amended to deal with this giving the president the power? Republican George Bush was in the White House and the GOP controlled the House of Representatives and the Senate. A Republican Congress WANTED the president to have the power to set the number because they lacked the gonads to vote on the number because they knew even in 2004 the existing number was too low back then and didn't want to go on record screwing their constituents by doing the bidding of the owners.

A few years ago the flavor of the moment was the excess pay of Federal employees. You couldn't watch Fox or read social media without hearing about it and my Congressman would use his franking privileges to get free postage to send me 'non-political' ads about reigning in government pay.

What no one ever told you is how it got that way.

Back when Billy Clinton was taking out time from his primary interests of chasing skirts to be president, the economy was rolling. The Federal government not only couldn't get people to stay, they had a lot of jobs left unfilled (and in Little Rock fast food joints were offering $9-$10 an hour starting wages and people with experience were being offered $10 to $12 an hour, they had signs up begging people to apply).

To address the problem Clinton and GOP Congress changed the Federal pay structure to pay 75% of similar private sector work. From that day forward, Federal wages have increased at less than the rate of inflation (in no year did they rise equal to inflation or above, in some years there was increase at all).

Despite wages not keeping pace with inflation around 2012 we hit the point where the Federal employee with no degree or just a bachelor's degree earned more than the similar non-Federal employee and Federal employee's with a masters did slightly better to even with non-government. Employees with a MD, DO, PhD, EdD, JD were further behind private sector than when the change was implemented.

Why is this relevant?

The key words, at no time did the raises keep pace with inflation. In real earning power government employees were worse off than when the change happened. The economy for people with less than a terminal degree for the most part just went in the toilet. So the political answer was blame the people who were losing ground more slowly than everyone else rather than point out American workers had just been screwed over for the last two decades.

We offer some of the skimpiest social safety net benefits in the developed world and despite that, if you have a kid living at home with you, you are better off on aid than working minimum wage. The Swiss pay similar taxes to what we have yet they earn more than we do, primarily because while they don't have a minimum wage per se, the various social safety net regulations require you to pay around $15-$17 per hour to be in compliance.

They also don't do stupid things like we do, such as cut $1000 worth of benefits because you earned an extra $400 punishing you for working.

But back to the exempt employee issue.

By law for numerous decades, we have taken the position that if you are in a professional position, that is you are allowed to exercise a decent amount of freedom in decision-making or you have a highly developed skill such as law, medicine, etc., that you are exempt from normal wage and hour rules. If you work 36 hours the first week of the pay period and you work 48 hours the second week, you don't have to take a half day off for the first week and you don't get OT for the second week as long as you are getting the work done. You manage four people in your section, you are exempt and so what if you slip off early on Friday but the next week you work Saturday to get the month-end reports done, we aren't going to track your time nor give you OT.

Think about that level of responsibility.

There are not that many people holding the responsibilities needed to qualify as an exempt employee who are making less than $47,000 a year.

Not many lawyers who are employees of someone else make that, doctors and nurses don't, CPA's generally aren't that low and so on.

What employers did was game the system.

Joe may be only making $30,000 a year and he has to run nearly everything past his supervisor Mike and there are three other guys like Joe in the office. To avoid OT, the company will say Joe is responsible for doing the job evaluation of Don who is the office flunky making deliveries. Sam has to fill out the job evaluation of Mary who answers the phones, Steve is a lead worker making $1000 more than Joe and Sam and he does Joe's evaluation and Daniel is a lead doing Sam's evaluation.

In practice none of those people doing the annual job evaluation have the power to fire the person they evaluate, if the person they evaluate is showing up late or playing the radio too loud they can't do anything about that either. But on paper they professionals because they "manage" another employee and if they have to work 45 hours a week every week, that's just too bad.

Oh and one last thing.

If the salary level to qualify for exempt had been pegged to inflation?
Today the level would be just over $104,000 a year.

(05-18-2016 12:24 PM)Crump1 Wrote:  All the move did was adjust the income range to 1975 levels. The law has not kept up with inflation.

Basically, your salary was so high that it wasn't really exploitation to expect you to work long hours.

But as time passes without adjustment it just becomes more of a way for companies to exploit outdated numbers to avoid overtime pay/hiring more.

I'm opposed to forcing companies to pay labor a higher price than it is worth (minimum wage)....and likewise, I'm opposed to forcing workers to sell their time for a lower price than it is worth.

(05-18-2016 12:24 PM)Crump1 Wrote:  All the move did was adjust the income range to 1975 levels. The law has not kept up with inflation.

Adjusted to 1975 levels it would be $104,954.64 actually giving credit for it happening midyear, it would be right at $100,000.

The 1975 equivalent of $48k was barely over $10k.

(05-18-2016 11:31 AM)mturn017 Wrote:  

(05-18-2016 11:12 AM)chiefsfan Wrote:  

(05-18-2016 09:42 AM)runamuck Wrote:  

(05-18-2016 09:24 AM)Libertygrad01 Wrote:  Google "A new expense looms for college athletic departments" from USA Today. Basically a new law that if workers don't make a certain amount they must be paid overtime if they work over 40 hours. Ark St AD said it could cost his dept up to $700,000 a year to comply.

another overreach by our current president with no congressional authorization. it will be interesting to see how it plays out

It's a good law, it's just that Athletic programs have unintended consequences. The idea that someone making a little over 30K per year without getting paid overtime is a little ridiculous.

Not necessarily. What about entry level positions? So everyone coming out of college will be making 47,500 now or going home at 5 o'clock?

Entry level people aren't supposed to be exempt employees.

Exempt employees are employees who, because of their positional duties and responsibilities and level of decision-making authority, are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA).

You are supposed to do at least some of the following:
1. Manage two or more employees.
2. Do outside sales (that is call on the customer outside of your work location).
3. Be a learned professional. Accountants (not accounts payable/receivable clerks), doctors, lawyers, registered nurses (but not licensed practical nurses), teachers, and similar jobs are exempt.
4. Administrative professionals (not administrative assistants) Marketing, IT, Human Resources, Finance, and other administrative personnel who require a high degree of knowledge and work independently qualify as exempt.

Entry level people are rarely managing employees and learned professionals and administrative professionals generally aren't paid below the threshold.

(05-18-2016 11:59 AM)mturn017 Wrote:  

(05-18-2016 11:54 AM)TrueBlueAlum Wrote:  

(05-18-2016 11:31 AM)mturn017 Wrote:  

(05-18-2016 11:12 AM)chiefsfan Wrote:  

(05-18-2016 09:42 AM)runamuck Wrote:  another overreach by our current president with no congressional authorization. it will be interesting to see how it plays out

It's a good law, it's just that Athletic programs have unintended consequences. The idea that someone making a little over 30K per year without getting paid overtime is a little ridiculous.

Not necessarily. What about entry level positions? So everyone coming out of college will be making 47,500 now or going home at 5 o'clock?

If they want to obey the law, yes.

I know what the regulations say. I was saying it's not ridiculous to be making a little over $30k/year and be expected to pull some overtime at an entry level position without making the employer calculate the overtime pay.

It's ridiculous to have this conversation because when the numbers were last updated, it only applied to people earning more than $100,000 in today's dollars.

(05-18-2016 12:46 PM)arkstfan Wrote:  

(05-18-2016 11:31 AM)mturn017 Wrote:  

(05-18-2016 11:12 AM)chiefsfan Wrote:  

(05-18-2016 09:42 AM)runamuck Wrote:  

(05-18-2016 09:24 AM)Libertygrad01 Wrote:  Google "A new expense looms for college athletic departments" from USA Today. Basically a new law that if workers don't make a certain amount they must be paid overtime if they work over 40 hours. Ark St AD said it could cost his dept up to $700,000 a year to comply.

another overreach by our current president with no congressional authorization. it will be interesting to see how it plays out

It's a good law, it's just that Athletic programs have unintended consequences. The idea that someone making a little over 30K per year without getting paid overtime is a little ridiculous.

Not necessarily. What about entry level positions? So everyone coming out of college will be making 47,500 now or going home at 5 o'clock?

Entry level people aren't supposed to be exempt employees.

Exempt employees are employees who, because of their positional duties and responsibilities and level of decision-making authority, are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA).

You are supposed to do at least some of the following:
1. Manage two or more employees.
2. Do outside sales (that is call on the customer outside of your work location).
3. Be a learned professional. Accountants (not accounts payable/receivable clerks), doctors, lawyers, registered nurses (but not licensed practical nurses), teachers, and similar jobs are exempt.
4. Administrative professionals (not administrative assistants) Marketing, IT, Human Resources, Finance, and other administrative personnel who require a high degree of knowledge and work independently qualify as exempt.

Entry level people are rarely managing employees and learned professionals and administrative professionals generally aren't paid below the threshold.

At the entry level they do. In larger markets and at larger firms sure they start out that high but not here. The cost of living is much lower as well though. I understand it was being abused but the one size fits all doesn't work for this any better than it does for minimum wage.

(05-18-2016 02:06 PM)mturn017 Wrote:  

(05-18-2016 12:46 PM)arkstfan Wrote:  

(05-18-2016 11:31 AM)mturn017 Wrote:  

(05-18-2016 11:12 AM)chiefsfan Wrote:  

(05-18-2016 09:42 AM)runamuck Wrote:  another overreach by our current president with no congressional authorization. it will be interesting to see how it plays out

It's a good law, it's just that Athletic programs have unintended consequences. The idea that someone making a little over 30K per year without getting paid overtime is a little ridiculous.

Not necessarily. What about entry level positions? So everyone coming out of college will be making 47,500 now or going home at 5 o'clock?

Entry level people aren't supposed to be exempt employees.

Exempt employees are employees who, because of their positional duties and responsibilities and level of decision-making authority, are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA).

You are supposed to do at least some of the following:
1. Manage two or more employees.
2. Do outside sales (that is call on the customer outside of your work location).
3. Be a learned professional. Accountants (not accounts payable/receivable clerks), doctors, lawyers, registered nurses (but not licensed practical nurses), teachers, and similar jobs are exempt.
4. Administrative professionals (not administrative assistants) Marketing, IT, Human Resources, Finance, and other administrative personnel who require a high degree of knowledge and work independently qualify as exempt.

Entry level people are rarely managing employees and learned professionals and administrative professionals generally aren't paid below the threshold.

At the entry level they do. In larger markets and at larger firms sure they start out that high but not here. The cost of living is much lower as well though. I understand it was being abused but the one size fits all doesn't work for this any better than it does for minimum wage.

First job I took after I was in private practice paid just above the "exempt" level. I didn't get paid OT, I managed zero employees, my opinion letters had to go through two (some times three) people before they could go out. I had zero settlement authority on cases and had to review the evidence and pleadings with a supervisor.

I was not treated as a "learned" professional because I was in an entry position rather than a position in line with my experience and should have been treated as a salaried employee.

It's really not that big of a deal. You want to pay only $30,000. Send your employee home when they've worked 40 hours or pay overtime. If they aren't working enough hours OT to warrant bumping them to $47k, don't increase their pay.

Another point. It has been 18 months since the White House announced they were directing Department of Labor to update the numbers and interestingly (to me) is that the number they threw out 18 months ago was $50k. Wonder whose back was scratched by making it $47k.

(05-18-2016 02:22 PM)arkstfan Wrote:  

(05-18-2016 02:06 PM)mturn017 Wrote:  

(05-18-2016 12:46 PM)arkstfan Wrote:  

(05-18-2016 11:31 AM)mturn017 Wrote:  

(05-18-2016 11:12 AM)chiefsfan Wrote:  It's a good law, it's just that Athletic programs have unintended consequences. The idea that someone making a little over 30K per year without getting paid overtime is a little ridiculous.

Not necessarily. What about entry level positions? So everyone coming out of college will be making 47,500 now or going home at 5 o'clock?

Entry level people aren't supposed to be exempt employees.

Exempt employees are employees who, because of their positional duties and responsibilities and level of decision-making authority, are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA).

You are supposed to do at least some of the following:
1. Manage two or more employees.
2. Do outside sales (that is call on the customer outside of your work location).
3. Be a learned professional. Accountants (not accounts payable/receivable clerks), doctors, lawyers, registered nurses (but not licensed practical nurses), teachers, and similar jobs are exempt.
4. Administrative professionals (not administrative assistants) Marketing, IT, Human Resources, Finance, and other administrative personnel who require a high degree of knowledge and work independently qualify as exempt.

Entry level people are rarely managing employees and learned professionals and administrative professionals generally aren't paid below the threshold.

At the entry level they do. In larger markets and at larger firms sure they start out that high but not here. The cost of living is much lower as well though. I understand it was being abused but the one size fits all doesn't work for this any better than it does for minimum wage.

First job I took after I was in private practice paid just above the "exempt" level. I didn't get paid OT, I managed zero employees, my opinion letters had to go through two (some times three) people before they could go out. I had zero settlement authority on cases and had to review the evidence and pleadings with a supervisor.

I was not treated as a "learned" professional because I was in an entry position rather than a position in line with my experience and should have been treated as a salaried employee.

It's really not that big of a deal. You want to pay only $30,000. Send your employee home when they've worked 40 hours or pay overtime. If they aren't working enough hours OT to warrant bumping them to $47k, don't increase their pay.

Not an option in the public accounting field. If we're going to pay you the rest of the year for "working" 36 hours a week (we get Friday afternoons off) then from Jan-April 15th you're going to work overtime. It's really a lopsided profession, you work your butt off the first couple of months then it becomes a pretty low stress job. My company has always tried to compensate for that extra time you put in during tax season. Friday afternoons off, starting off with 2 weeks of vacation and going up from there, the office is closed for three days around X-Mas, Thanksgiving and 4th of July. And no you're not a professional your first 3-5 years but you're learning to be a professional.

(05-18-2016 02:41 PM)mturn017 Wrote:  

(05-18-2016 02:22 PM)arkstfan Wrote:  

(05-18-2016 02:06 PM)mturn017 Wrote:  

(05-18-2016 12:46 PM)arkstfan Wrote:  

(05-18-2016 11:31 AM)mturn017 Wrote:  Not necessarily. What about entry level positions? So everyone coming out of college will be making 47,500 now or going home at 5 o'clock?

Entry level people aren't supposed to be exempt employees.

Exempt employees are employees who, because of their positional duties and responsibilities and level of decision-making authority, are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA).

You are supposed to do at least some of the following:
1. Manage two or more employees.
2. Do outside sales (that is call on the customer outside of your work location).
3. Be a learned professional. Accountants (not accounts payable/receivable clerks), doctors, lawyers, registered nurses (but not licensed practical nurses), teachers, and similar jobs are exempt.
4. Administrative professionals (not administrative assistants) Marketing, IT, Human Resources, Finance, and other administrative personnel who require a high degree of knowledge and work independently qualify as exempt.

Entry level people are rarely managing employees and learned professionals and administrative professionals generally aren't paid below the threshold.

At the entry level they do. In larger markets and at larger firms sure they start out that high but not here. The cost of living is much lower as well though. I understand it was being abused but the one size fits all doesn't work for this any better than it does for minimum wage.

First job I took after I was in private practice paid just above the "exempt" level. I didn't get paid OT, I managed zero employees, my opinion letters had to go through two (some times three) people before they could go out. I had zero settlement authority on cases and had to review the evidence and pleadings with a supervisor.

I was not treated as a "learned" professional because I was in an entry position rather than a position in line with my experience and should have been treated as a salaried employee.

It's really not that big of a deal. You want to pay only $30,000. Send your employee home when they've worked 40 hours or pay overtime. If they aren't working enough hours OT to warrant bumping them to $47k, don't increase their pay.

Not an option in the public accounting field. If we're going to pay you the rest of the year for "working" 36 hours a week (we get Friday afternoons off) then from Jan-April 15th you're going to work overtime. It's really a lopsided profession, you work your butt off the first couple of months then it becomes a pretty low stress job. My company has always tried to compensate for that extra time you put in during tax season. Friday afternoons off, starting off with 2 weeks of vacation and going up from there, the office is closed for three days around X-Mas, Thanksgiving and 4th of July. And no you're not a professional your first 3-5 years but you're learning to be a professional.

Until you are trusted with the discretion, you shouldn't be exempt and people weren't until inflation caught up with entry level employees.

So when are they adjusting AMT for inflation?

(05-18-2016 03:00 PM)Saint3333 Wrote:  So when are they adjusting AMT for inflation?

2013

(05-18-2016 03:00 PM)Saint3333 Wrote:  So when are they adjusting AMT for inflation?

Have you considered hiring an accountant?

Because starting with the 2012 tax year the exemptions for AMT increased AND were tied to inflation. There just ain't been much inflation.

But to answer your question, they started with the tax year beginning January 1, 2012. It didn't become law until January 1, 2013 but it was made retroactive.

(05-18-2016 02:51 PM)arkstfan Wrote:  

(05-18-2016 02:41 PM)mturn017 Wrote:  

(05-18-2016 02:22 PM)arkstfan Wrote:  

(05-18-2016 02:06 PM)mturn017 Wrote:  

(05-18-2016 12:46 PM)arkstfan Wrote:  Entry level people aren't supposed to be exempt employees.

Exempt employees are employees who, because of their positional duties and responsibilities and level of decision-making authority, are exempt from the overtime provisions of the Fair Labor Standards Act (FLSA).

You are supposed to do at least some of the following:
1. Manage two or more employees.
2. Do outside sales (that is call on the customer outside of your work location).
3. Be a learned professional. Accountants (not accounts payable/receivable clerks), doctors, lawyers, registered nurses (but not licensed practical nurses), teachers, and similar jobs are exempt.
4. Administrative professionals (not administrative assistants) Marketing, IT, Human Resources, Finance, and other administrative personnel who require a high degree of knowledge and work independently qualify as exempt.

Entry level people are rarely managing employees and learned professionals and administrative professionals generally aren't paid below the threshold.

At the entry level they do. In larger markets and at larger firms sure they start out that high but not here. The cost of living is much lower as well though. I understand it was being abused but the one size fits all doesn't work for this any better than it does for minimum wage.

First job I took after I was in private practice paid just above the "exempt" level. I didn't get paid OT, I managed zero employees, my opinion letters had to go through two (some times three) people before they could go out. I had zero settlement authority on cases and had to review the evidence and pleadings with a supervisor.

I was not treated as a "learned" professional because I was in an entry position rather than a position in line with my experience and should have been treated as a salaried employee.

It's really not that big of a deal. You want to pay only $30,000. Send your employee home when they've worked 40 hours or pay overtime. If they aren't working enough hours OT to warrant bumping them to $47k, don't increase their pay.

Not an option in the public accounting field. If we're going to pay you the rest of the year for "working" 36 hours a week (we get Friday afternoons off) then from Jan-April 15th you're going to work overtime. It's really a lopsided profession, you work your butt off the first couple of months then it becomes a pretty low stress job. My company has always tried to compensate for that extra time you put in during tax season. Friday afternoons off, starting off with 2 weeks of vacation and going up from there, the office is closed for three days around X-Mas, Thanksgiving and 4th of July. And no you're not a professional your first 3-5 years but you're learning to be a professional.

Until you are trusted with the discretion, you shouldn't be exempt and people weren't until inflation caught up with entry level employees.

With what discretion? Are you saying only partners/principals should be?

Personally, I think make all the professional industries completely exempt. There's plenty of competition for talented young professionals that they're not going to be taken advantage of. The problem lies when you pay someone 30K a year slap a "manager" title on them and make them work 60 hours every week but they're essentially still unskilled labor. I started out making 28,500 about 11 years ago and at the time felt like I was rich. Mid twenties, no responsibilities. Life was good. If I hadn't progressed upward from there I would have and easily could have left (even in the recession years). Hell, if I had to work like I do in tax season all year for what I make now, I would find other work. A big part of the benefit of my job is the amount of time I have to spend with my family from April 15th-December 31. The new rules probably aren't going to be a big deal financially but it's a pain in the ass administratively and when you've already decided what someone is worth compared to other employees that are over the threshold then you have to make some calibrations if you want to keep things fair.

Another option, one I've used on more than one occasion, is to simply deem them as independent contractors and 1099 them for their services with non-compete and non-disclosure agreements in place. Obviously, this strategy only works in certain professions but coaching is potentially one of them. Point is, the smart institutions and "bidnessmen" will find a way to survive and believe me when I say brain gears are churning right now in every sector impacted with this update...there will always be options to keep labor costs down in addition to the obvious: pink slips.

(05-18-2016 04:11 PM)airtroop Wrote:  Another option, one I've used on more than one occasion, is to simply deem them as independent contractors and 1099 them for their services with non-compete and non-disclosure agreements in place. Obviously, this strategy only works in certain professions but coaching is potentially one of them. Point is, the smart institutions and "bidnessmen" will find a way to survive and believe me when I say brain gears are churning right now in every sector impacted with this update...there will always be options to keep labor costs down in addition to the obvious: pink slips.

You might get yourself in more trouble with that. If they are under your control - ie setting work hours, etc, then it would be hard to win a challenge to them being 1099 employees.

It would be near impossible to 1099 a full-time coach.



And, if too many try to loophole their way around it, DOL will just close that one.

Ain't nothing more entertaining than listening to someone who plays the independent contractor game and the IRS or DOL arrives and disagrees.

Freaking Shock and Awe.

(05-18-2016 04:11 PM)airtroop Wrote:  Another option, one I've used on more than one occasion, is to simply deem them as independent contractors and 1099 them for their services with non-compete and non-disclosure agreements in place. Obviously, this strategy only works in certain professions but coaching is potentially one of them. Point is, the smart institutions and "bidnessmen" will find a way to survive and believe me when I say brain gears are churning right now in every sector impacted with this update...there will always be options to keep labor costs down in addition to the obvious: pink slips.

A non-compete clause is a fast way to get the independent contractor relationship deemed to be employment and with it an obligation to pay FICA, medicare tax, unemployment insurance, and worker's comp insurance and penalties.

And for the record.

You can't do independent contractor with coaches, head or assistant because the NCAA requires you supervise and monitor their activity and report all outside earnings.

Making a coach an independent contractor is a guaranteed finding of lack of institutional control if there is any NCAA violation.

(05-18-2016 11:22 AM)ark30inf Wrote:  I'm vehemently opposed to the minimum wage vote bribing games.

But this one is a legit change that needed to be updated.

Sadly, our poor G5 athletic programs have had to take advantage of the disparity...but now won't be able to overwork without paying anymore...and will have even more budgetary obstacles.





Sent from my SAMSUNG-SM-G870A using Tapatalk

Bribing games or ensuring that someone who has a job and is busting their ass more than 40 hours a week can put food on the table without public assistance. Forcing companies to treat their workers right isn't asking too much.