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President Obama is planning to revamp the Department of Labor's regulations exempting certain employees from overtime pay. Currently, salaried managers who make at least $23,660 per year are not compensated for overtime hours. It doesn't matter how many hours they work, they make $23,660 per year.
Let's look at the numbers. If you are a salaried manager who makes $23,660, then you are earning $455 dollars each week, 52 weeks per year. Salaried managers are sometimes able to take a day off if they are sick, or maybe even a week for vacation, but the annual pay divides into $455 per week.
$455 per week is $11.38 per hour for 40 hours of work.
$455 per week is $9.10 per hour for 50 hours of work.
$455 per week is $7.58 per hour for 60 hours of work.
Wal-Mart Manager Speaks
According to Salon's exclusive interview with a Wal-Mart manager, he routinely works 48 hours per week. During the holiday season, he will work 60 hours per week. To be fair, his annual salary is $44,000, which is higher than the federal cut-off for overtime exemption. At 60 hours per week, he is making about $14 per hour. The more hours he works, the less he makes per hour.
Once the law changes, many wonder if Wal-Mart's practices will change. Currently, overtime-eligible employees do not work so that managers can put in time on the cash register, or doing other non-managerial jobs. Wal-Mart saves money overworking their managers because the managers are currently exempt from overtime pay.
In the interview, the manager tells Salon that this practice is bad for business and bad for customers. When managers are doing other people's jobs, there is nobody to make sure things on the floor are going smoothly, to get merchandise re-stocked or respond to customer calls.
Another problem with Wal-Mart's treatment of managers is that they don't get breaks or time to eat a meal over the course of their 9- to 10-hour days.
This Wal-Mart manager tells Salon that regardless of the law, he expect Wal-Mart to continue to hire fewer people in order to save money. He says that there is plenty that does not get done because they don't have enough people working. It will be interesting to see if new overtime laws force Wal-Mart to hire more people, or whether Wal-Mart will simply let customer service deteriorate.
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