Okay, so our company got sued over an overtime issue, and it looks like they are paying out settlements to certain employees. We are all salary employees, but these particular people cited having to work excessive overtime blah blah blah...

For the record I really don't usually have to work more than 40 hours a week.

So the company's reaction has been to shift us to hourly to avoid this in the future... and at the same time deliver a massive "stealth" pay cut. They have taken our pay, stacked on our bonus (which is not very significant) then divided our work week by 47.5 hours. In the end if you use your vacation time and/or sick leave it will end up being a 15-18% cut in total pay. Interestingly in delivering the news the managers were absolutely verboten from using the words "pay cut" and have been given canned replies like "if your one of those people that only does the minimum... then you might see less"

Has anyone else seen anything similar to this?

Nope.  And another thought - when a company starts playing games with pay and benefits, that's a pretty good indicator it's time to look for work elsewhere.

+1

Time to bounce.

+2, but don't cut off your nose to spite your face. Make sure of where your going and that you want to be there.

I'd need to know more about those who were determined to be non-exempt.  Exempt status seems to be cut-and-dry.

I think it's crazy to eject from any job in this economy.

What do you do?

I wouldn't eject until you have another job lined up. If you eject without doing that you may be in for a really hard time finding another one depending on your line of work.

I personally am not really concerned about the exempt status, but in defending this move they've stated repeatedly that this is an "industry average" of how conversions to hourly rates are being calculated! It just blows my mind that they can lop off 7.5 hours of work a week and NOT call it a pay cut! Further in my industry news reports go flying around at mention of a 5% pay cut, let alone a 15% one!

And yeah, our benefits got whacked months ago... It definitely appears to be a ship on the way down. I feel kinda bad for our customers

Yep. Been there had that experience. It only got worse. I was just too young and inexperienced to know better.   It won't happen again.

I'd be looking elsewhere for employment.

Find another job, then give 2 weeks notice.  At the end of 2 weeks, depart.  No muss, no fuss, no drama.

This is NOT a good economy to be "between" jobs.  Make sure you have a new one lined up before you bail on your current one.

- CD

I ejected when I found out the CEO was floating pay roll and borrowing to cover benefits....

Fortunately I'm in a good field for the current situation, and the position at this company has radically increased my marketability, but man... the hunt and all the change will suck. Hopefully I'll get alot of extra BRD money out of a change tho

Are you saying you're now getting paid 47.5 hours while only working 40?

As most of the above posters have mentioned, line up a new job, give two weeks notice and move on with your life.

Good luck.

Nope.

We are currently paid a salary based on 40 hours per week.

After the change they are taking our salary and dividing it by 47.5 hours per week and 52 weeks.  If I take all PTO and sick days in a year it will basically amount to a 18% pay cut... that's NOT a pay cut according to them

To put it simply, to make the same money I am making now I need to work 47.5 hours per week, and not take time off for any reason.

the fair labor standards act requires all employees be paid by the hour. it allows 5 classes of exemptions; managerial, administrative, professional, what i call the computer geek exception and another that i do not recall as i write this. these exemptions are not mandatory.  it is up to the employer if they wants to take advantage of these exemptions. these exemptions are for the employers benefit.

with these exemptions come rules. like not being able to dock time from an employee who leaves early on a particular day, obviously there are many others.  should the employer breach these rules they nullify the exemption status and are required to revert to hourly pay.  based upon what you say in the op, your employer breached these rules got caught and to play it safe is eliminating the exemption status. or as the case of many companies it was found out that many who enjoyed the benefits of salaried employees did not meet the exemption tests in the first place.  

the company was probably hit with back pay and huge fines  (as much as 400 % of the back pay if found to be willful and going back as far as 6 years) and does not want to make the mistake again.  you see this often in co's that as they grow through the transition from small co to large do not realize the effect of the labor laws out there and promote their seceretary or bookeeper who processed payroll to the top human resource job.  in the united states today, the top human resource job should be held by a labor attorney. yes it is truly that complicated. while many corp exec's  see the job of human resources as an expense, it is truly a cost savings.

Time to go.....sounds like slavery in the name of the economy...wants to work you extra and not pay

look for a new job, but do not panic. when the dust settles just ask your boss for a raise and you will be back to where you started.

Find another job but make sure it is a good one. That is the hard part . I have been looking for six months.

+1

My current company cut my pay and increased my cost for benefits...

I start a new job on Monday.

1. Dont quit unless you have something else ready to go.
2. Yes. But they were talking about 13 pieces of flare as the minimum.

This.

I agree the company sounds either unethical or in financial trouble.  Find something better, then give your two weeks.  A 15%-18% pay cut is better than quitting and having no job for 12 months.

I was in a fairly similar situation recently and pulled the eject handle. Started working on the grounds crew of a golf course when I was 16 and have done so for the past 7 years through college. Last year I was promoted to assistant superintendent and went from a wage earner to salary. This isn't a field I studied nor intended to stay in after college, but with the way things are, I figured I should stick it out. Earlier this year, they cut my salary and sent me back to wage, and after a second pay cut I suddenly found myself, and the rest of the crew, making the same amount I did when I was 16. At the same time my boss decided to take another job, gave his 6 weeks notice and then start using up his vacation time, effectively leaving me in charge. Here I was making 9.50 an hour while being asked to work 70+ hours a week to keep the place from burning down. I did that for about two weeks, and in late May went to the ownership telling them I wanted to be paid my boss' salary or they'd have to lay me off. They balked, so I left, filed for unemployment and was approved because of the significant loss of pay and benefits. Now I'm back in school working towards my Masters' Degree.

Check your state's laws, if your employer slashes your pay and benefits, it could be considered the same as a layoff, and you can bounce out of there and collect for a few weeks while you get yourself back in action elsewhere. Good luck.

I normally agree, but they were forced to "play games" with pay in this case.



 

Actually, the company is making record profits. People are sorta rushing into our product trying to save on IT costs...  They are really leaning on the whole "economy" bs to cut all kinds of things, but we've obviously seen the earnings reports as the company is public.  

"We have to learn to do Moar with Less".

Been hearing it for 15 years.

Most state labor codes are very specific in determining who is exempt and who is non-exempt.  And employer can't just decide that for themselves.  The rules are intentionally written that way to prevent this very type of abuse.  There's a good chance your company is violating all sorts of labor laws not only with this issue, but also with the way they are calculating your "new" pay.  Do your homework and find out.

If they are playing fast and loose with labor laws, I wouldn't necessarily eject.  Just take their shit while looking for a new job.  Once you find one, make the change, then file complaints with your state labor board and get all the money you're owed, plus penalties.  (ka-CHING!)   In the meantime, get copies of everything you can for evidence, and take it home for safe keeping.  (Otherwise you may lose it when security cleans out your desk and escorts you out of the building.)

I agree - when management starts pulling this shit, it's time to start looking for another job.  And planning your revenge.  

At least they don't expect you to "do everything with nothing."