Monday at the Bar: Salaried Labor Contest

Unless you are a lawyer you likely didn't notice that this past week a fairly epic event happened in the area of salaries.

Now, I don't mean hourly wages, this must be noted from the onset.  No, I mean those individuals who are paid on salary, i.e., $X per year, not $X per hour.

Not too surprisingly, this is a topic that's fairly extensively, and somewhat confusingly, regulated by the Federal Department of Labor.  One of the things regulated is the threshold at which a person can be regarded as a salaried employee.  Why does this matter? Well, below that threshold you'll be treated as an hourly employee and entitled to overtime if you work overtime, as overtime is defined in the regulations.  Above it and you are not.

Note, there's a lot, lot, lot, lot more to this than just that the overtime threshold for the salary "exemption" that exists in this area would have gone rom $23,000 per year to $47,476.Quite a change.

But a Federal Court in Texas enjoined implementation of the new rule on a temporary basis so that it will not go into effect on December 1, 2016, as planned.  That doesn't mean it'll never be cleared as legal, but it will be postponed at a bare minimum.

Things like this turn out to be incredibly complicated and have all sorts of peculiar effects.  It is, therefore, hard to know what to make of them.  Fro example, before the big boom in the Western economy to be followed by the big Weed boom in the Colorado economy the average salary for lawyers in Denver was about $45,000 a year, much smaller than many would imagine.  I don't know what it is now, but my guess is that its quite a bit higher.  Be that as it may, there's actually a fair number of professionals that make relatively small wages when starting out or, frankly, just make small wages.  Some, I agree, would look at $45,000 and say that isn't small, but if you are trying to raise a family on it and have a ton of student debt it isn't large.

But if you are a small time operator yourself, with an employee who is salaried, then what?  It might now seem like a problem, but again, if you are in the law, for example, and are working 60 hours a week or more, and have a new associate who also is, then what?  I suppose your options are to boost him or her up over the salary threshold or pay overtime, either of which might not be a financial option for you.

This dilemma, by the way, isn't a new one.  Here's a New York Times cartoon from 1916 on the plight of the Salaried Man.  FWIW, as the captions are hard to read, the umbrella on the left says "Bigger Wages" and the one on the right says "Bigger Profits".  This came in the context of a boom in both during World War One.