Uncompensated overtime and punitive damages

Unpaid Overtime

The author of this response is asked to answer to a number of questions pertaining to a certain article that was to be reviewed for this assignment. The author of this report is asked to identify the problem or potential problem referenced in the article. The author is then asked to parse out at least two potential arguments or themes. The best solution, in the opinion of the author, is asked for. Finally, the final recommendations of the organization are to be explained and articulated.

Questions Answered

The problem centers on the debate on whether being classified as a salary employee gives an employer license and permission to work said employee as many hours are as needed with no special provision for overtime. Rather, regardless of the number of hours worked, the employee gets the same earnings as they are paid a flat salary rather than being paid by the hour. The arguments for and against the practice are as follows. People that accept the practice say that employees in such an arrangement are getting a guaranteed salary, often do not get docked pay for missing a partial day and do not have to fuss with clocking in and out on daily basis. People against the practice say that the practice of working salary people inordinate amount of hours, typically for little to no extra pay, is abusive and takes advantage of the need for work that the employee seeks out. On top of that, overtime abuses by employers can cause anxiety and/or depression in employees (Kleppa, Sanne & Tell, 2008)

In many countries, employers are not at liberty to just classify anyone they want as salary. For example, in the United States employees must have a certain amount of power in the firm and/or they must be in a position to hire and fire people. Classifying transactional and service employees as salary so as to avoid payment of overtime is often in violation of wage and hour laws. Penalties for abusing the classification process, at a minimum, usually involves back-payment of uncompensated overtime and punitive damages can result as well. Regardless, employees who enter into salaried arrangements, whether they be sanctioned by law or not, do not have a gun placed to their head and can always say no. On the other side of that coin, employers should not automatically just abuse the process just because they can and they should certainly not engage in a bait and switch when they indicate that a certain work hour load is going to be the norm and then jack it up once the employee commits to the firm or position.

Employers would probably counter that some employees just take longer than they should to get a job done or otherwise dawdle and that they are paying what they perceive to be a fair market price for the labor that they need completed. Indeed, if employees are abusing the fact that they get a guaranteed salary and are, as a result, in the office more than they really should be, then the employer would have a point. However, employers should also recognize when they are taking advantage of the fact that they are not having to pay overtime to salaried people and should understand that there is the rule of diminishing returns when working people more and more hours. While it may be attractive to have five people do the work that would normally be done by six people, as noted by the article reviewed for this report, but the same article also notes that work quality and productivity tends to trail off and perhaps it is wiser to actually hire the sixth person and have all of the team work more reasonable hours (Michael, 2013). With other non-work life concerns such as spouses, children, family and religious/cultural concerns, it is important that employers not work employees to the edge of their tolerance but instead encourage a health work/home balance (Gatrell, Burnett, Cooper & Sparrow, 2013).

There a number of proposed solutions that the author of this report can offer to both employers and to employees to make the salaried work/life balance dynamic work out for everyone. First, employees should make sure that they do not sacrifice too much to take and keep a new position. They should take full account of what will be expected of them, the amount of timing of the associated work hours and whether they can juggle that and the rest of their life’s requirements and obligations (Sayah & Sub, 2013). The amount of the salary and the prestige of the position is not typically worth the trouble if it wrecks everything else or at least a marriage. It is true that people should not be too picky and they should certainly not be entitled but there is always options and people should not rush into something they cannot perform well and in a way that allows for a balanced life.

Also, employers are sometimes a little too self-righteous and sanctimonious about the privilege to have a job with their firm and they are sometime not apologetic or shy about saying that the job and its requirements will be demanding. While some people would gladly accept such a challenge, it can cause hell for work/life balance. Some workers are alright with that but most would probably not be so willing to engage such an opportunity unless no better or more viable choice is present. However, no one that reads this report should presume that the bias and animus should always be against the employer because that is simply not the case. Employees sometimes do some fairly dastardly or at least haphazard things and they should be called out for that as well. As noted before, employees should not take their salary for granted or just assume that they can just work the extra hours to cover for any messing around they do at other times in the week. If work hours outside the normal forty hours a week are needed, then so be it. However, if all of the required work can be completed within that forty hours, then there is typically no reason why extra hours are even needed.

That being said, some employers judge employee efficacy, loyalty and performance by the amount of hours put in. Not all employers do this but the ones that do have a fairly stunted view of what makes a good employee and what does not. Obviously, if there is a glut of work to be performed and one person in particular puts away a great amount of it, that person should be lauded. However, if someone is asked to do “x” amount of work and they get it done in less than 40 hours (or whatever the normal schedule is), then that person should be lauded as well. Some people are happy to just do their job and move on to the home and personal life. Not everyone wants to climb the corporate ladder and put in tons of hours. There are people that do, but those that do not should not be treated as second-class workers. As long as they are not castigated for doing less than others, even if they do at least the minimum, there is a place for them as well.

Overall, the solution is for the employee to know what they are getting into and for employers to be honest about what they are truly offering without being abusive or too demanding of their employees. Burning out employees by performing more work with less people may seem like an attractive thing but there are employers that do not abuse employees like that and the best and brightest tend to flock to the firms that offer the best work experience and upward mobility while at the same time offering a good work/life balance (Kumar & Chakraborty, 2013).

Additionally, employers need to make sure that they are at liberty to classify employees as salary in each given case because many countries and areas do not permit widespread usage of that practice as a means to avoid payment of overtime (Hsiao-Ying & Kleiner, 2005). Avoiding overtime is not all that hard to and just requires hiring the right amount of people to get the job done. If work ebbs and flows a lot, the use of on-call seasonal employees can be used to get work done when it peaks while at the same time not committing to too much in terms of employee/employer taxes and expenses or other overhead that comes with a regular hire (Bonet, Cruz, Fernandez & Justo, 2013). Again, as long as the employer is being honest and genuine about what they are offering while at the same time not taking advantage of the desperation or general needs of employees, they are not doing anything wrong.

Lastly, employers can and should use salaried pay structures for positions of power and responsibility that make sense. Salary payments make a lot of sense for situations where employees’ hours ebb and flow but predictability in salary costs is desired. However, lower-end workers should never be salary unless it is a special situation and it’s not taking advantage of the person being classified as salary. Even part-time employees may be attracted by a salary payment so that their pay is consistent even if their hours swing wildly.


In the end, employers and employees need to be partners in a working arrangement rather than adversaries. The employee must understand that the employer needs a reliable employee that gets their job done while the employer should not take advantage of the fact that they do not have to pay overtime to certain people. The proper staffing levels and techniques can help avoid burning out employees while at the same time not spending too much on labor costs. However, there are some situations where paying a little more is the right thing to do.


Bonet, R., Cruz, C., Fernandez Kranz, D., & Justo, R. (2013). TEMPORARY


Industrial & Labor Relations Review, 66(1), 55-87.

Gatrell, C.J., Burnett, S.B., Cooper, C.L., & Sparrow, P. (2013). Work-Life Balance

and Parenthood: A Comparative Review of Definitions, Equity and Enrichment*

Work-Life Balance and Parenthood: A Comparative Review of Definitions, Equity

and Enrichment. International Journal Of Management Reviews, 15(3), 300-316.


Hsiao-Ying Ko, (., & Kleiner, B.H. (2005). Analysing Jobs to Determine Exempt or Non-

Exempt Status. Equal Opportunities International, 93-100.

Kleppa, E., Sanne, B., & Tell, G. (2008). Working overtime is associated with anxiety and depression: the Hordaland Health Study. Journal Of Occupational And

Environmental Medicine / American College Of Occupational And Environmental

Medicine, 50(6), 658-666. doi:10.1097/JOM.0b013e3181734330

Kumar, H., & Chakraborty, S. (2013). Work Life Balance (WLB): A Key to Organizational Efficacy. Aweshkar Research Journal, 15(1), 62-70.

Michael, S. (2013, June 18). Unpaid overtime: Exploitation or part of the job?

News.com.au. News.com.au | News Online from Australia and the World |

NewsComAu. Retrieved September 9, 2013, from http://www.news.com.au



Sayah, S., & Suss, S. (2013). Conflict between Work and Life: The Case of Contract

Workers in the German IT and Media Sectors. Management Revue, 24(3), 222-

224. doi:10.1688/1861-9908_mrev_2013_03_Sayah

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