My supervisor asked me to convert my compensation from an hourly employee to a salaried one. I am in dilemma if I should accept this or not.

I am an IT professional and overseeing a fairly large project. I was hired as an entry level developer but I quickly learned much of their processes and bumped me up in responsibilities but without much pay increase(~4% total in last 2 years).

I will be launching my project in couple of months and it will require me to work a lot. As a lead, I also manage several other developers and I will be required to work overtime (~ 5 hrs each week)

I was hoping to make some money during this process. I would give the company what they want and also make some money. It was a win-win situation.

Now that the manager has offered a salaried position (with 4% increase over my current salary) that doesn't pay overtime, I am a bit confused. There is nothing that encourages me to work over 40 hrs. I can just do the regular 40 hrs, be an average employee and launch the project at the normal pace. As an hourly employee, currently I have an incentive to work past 40 hrs to get into overtime and launch the project faster.

I would love to know some ideas if I should accept this offer or not?

  • If they switch you to salaried, is the loss of overtime really the only thing that changes? What about benefits? – David K Feb 8 '18 at 17:40
  • Some ideas on what? What is your goal? We surely can give you ideas but many of them won't apply to this situation, please clarify and add a goal to your post. – DarkCygnus Feb 8 '18 at 17:50
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    This is essentially a promotion without a title. You should figure out what your pay (with overtime) is at 55 hours (Hourly * 40 + Hourly * 1.5 * 15) and expect that as a salary. If they talk in terms of annual amounts, take the number you derived and multiply by 2080. I say 15, not 5 additional hours because that ~5 hours will grow. Trust me on that one. – Wesley Long Feb 8 '18 at 18:42
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    You should add a location tag. In the US, there are requirements for types of jobs that are exempt and non-exempt, and often salaried and hourly break on similar lines. In other words, a boss can't just switch someone from non-exempt to exempt, without a job change to go with it. – thursdaysgeek Feb 8 '18 at 18:57
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    I agree with @thursdaysgeek. The locale matters in this case. US employees aren't afforded a lot of the protections that are extended to European workers. – Lumberjack Feb 8 '18 at 20:35

I would calculate an assumed x amount of overtime pay into each week and then express to them that a pay increase including that 'probable overtime buffer' would be required.

Only bad employers try to bully people into doing more work for the same pay.

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If your employer is offering you the option to move to salary and you feel you can be more productive as an hourly employee, then you need to approach your employer and make your argument for why you are turning down the offer to go to salary.

If your employer is not actually offering you to go salary as an option but rather telling you (let's not focus on guessing why employer is doing this), then I would still make the argument for why you believe that remaining an hourly employee will allow you to continue to be a more productive employee.

I have to warn you, while you may think that you will not have to work past 40 hours because now you have been forced to be a salaried employee, if you have already set that expectation, your employer will still be expecting for you to do over 40 hours a week.

I say this because perhaps the move, if its not an option that you asked for, but more one that is being imposed upon you, I would guess the move is to avoid paying all that overtime you have been accumulating, if its customary for you to do over 40 hours a week.

If this is common for you, then your employer may have decided for his own budgetary reasons, to compel you to become a salary employee, this makes his books more manageable and you can still do all the overtime you want, but now you are telling us, that you will not do all this overtime because your employer will make you salaried. Not good.

If indeed, you felt you needed to do overtime hours for these past projects and let's pretend I was an old friend of yours, I would have advised you to speak to your employer first and make the case for why you will need more than the legally required time to get these projects completed.

My guess, based on what you have written, is that you did not do this or did not do this in such a way that it did not become a habit and so your employer is simply protecting his interests. The purpose of a company, as the owner of one, is to generate revenue more than costs.

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  • Thank you for the suggestion. I think the best idea in this case is to talk and explain why I will be more productive. – elixir Feb 8 '18 at 17:57

Due to large numerous factors that determine your financial background. I would recommend that you calculate this yourself. Your assumption here would be based that on the hours you put in last 1-2 years would the relatively the same as a salary employee.

Create a spreadsheet that details all your hourly + OT rate and your paychecks for the month. Include all your family expenses, savings account to the penny. See the balance in the end of each month.

Then compare that with your new salary, include the benefits that you are getting with salary and see how much you are off. If you believe they will overwork you for 10+ more hours per pay cycle then calculate that in. Include also additional expenses you may have in the future for both (house, medical bills, car, etc.)

If your calculation lands to a negative or around the same amount (ask for 10-20% more increase) and explain you'll need this in order to move to salary. If you net higher in the end ask for the increase anyways and if they don't give it, it's ok since you make more money in the end.

Hope this helps.

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