What is the difference between hourly and salary employment? How does it apply to Grooms? We are once again fortunate to have our very own supporter (and knowledgeable Human Resources Consultant) Marcia Hancock from The Job Search Advisor to give us the scoop. Here she goes!!!
Are You Salaried or Hourly? How Are You Being Paid?
A friend of mine recently started a new job as a part-time, salaried employee. The job entails hands-on, task-oriented yet professional work. When the job was offered to her, the hours per week were to be 25. The salary she is paid is (supposedly) based on 25 hours per week. The reality is she works more than 25 hours per week and her salary has not been adjusted for the extra 5 or so hours she works per week.
What Has This To Do With You, A Groom?
You were just hired as a Groom to work three (3) 8 hour days or 24 hours a week at a professional show barn. You routinely work 10 or more hour days and are ‘on call’ and on ‘stand-by’ on your day off because, as we all know in the horse biz, horses are on their own schedule and sometimes Grooms need to wait for clients, the vet, or the farrier.
How should you be paid? Are you eligible to be paid overtime for the extra hours per day you work? And what about the 50 hour workweeks? Should you be paid more for the extra time?
So what does ‘hourly’ or ‘salaried’ really mean when it comes to being paid for your time?
The Salary Test
What does ‘salaried’ or ‘exempt’ mean? That an employee is ‘exempt’ from overtime laws and must work the hours necessary to complete the job and is paid based on an annual basis. The workweek for ‘salaried’ or ‘exempt’ employees is 24/7, Sunday thru Saturday with responsibility to work as needed by the employer and required of the job.
‘Hourly’ or ‘non-exempt’ workers are paid by the hour and receive overtime pay for any hours worked over 40 hours per week under Federal law. Employees who are paid less than $23,600 per year or $455 per week are hourly or ‘non-exempt’.
Under Federal law, the rate of ‘OT’ pay is one and a half times the regular rate of pay for each hour worked above 40 hours a week. And hourly employees must be paid the Federal minimum wage of $7.25/hr. California the minimum wage is $8/hr and if you are lucky enough to be a stable hand in San Francisco, the living wage is $10.24/hr. The work week is 5 days a week, 8 hours per day but the days may vary depending on business needs. Many types of jobs require a ‘flexible’ work schedule.
Some states like California require workers to be paid overtime for any hours worked over 8 hours per day. (California has an employment law that states whichever law benefits an employee that is the prevailing or governing law. So California workers are paid overtime for any time over 8 hours worked as an exception to Federal law.)
So, if you work as a Groom in CA for $8 per hour, and you only work two days a week, you still qualify for OT. For example, on the first day you work 8 hours, and on the second day, you work 12. You qualify for OT on 4 of those hours from the second day even though your total workweek was only 20 hours.
You are a Groom and working the Class A Show Circuit with prized horses and well-known riders! Or your job allows you to work with equine transports to hospitals and other facilities. Excited! But how will you be paid?
If you are an employee and paid by the hour, typically how most Grooms should be paid, your pay might include the time you spend traveling from one location to another including commute time to and from any airport or destination, air travel time and travel time back and forth from lodgings. The hotel room is considered your ‘home’, so the clock stops once you enter and starts when you exit your room. You would be eligible for ‘OT’ as an hourly employee.
On a side note, you are covered under Worker’s Compensation in the same manner-before you enter your room or accommodations, and after you exit same, you are covered under any Worker’s Compensation policy. The hotel room is considered your home and any accidents or injuries sustained within the walls of your accommodations would not be covered. So if you are accosted, drag the assailant into the hall to ensure you are covered by W/C!
The Duties Test
How an employer determines whether an employee is hourly or salaried is outlined in the Federal Fair Labor Standards Act (FLSA). An employee is not considered to be salaried or ‘exempt’ simply because of his or her job title. Having the title ‘Manager’ does not make your job ‘salaried’.
To be ‘salaried’ or ‘exempt’ from overtime laws, you must earn wages of at least $455 per week and your job duties must meet criteria set by the ‘FLSA’. These criteria differ depending on the type of employee and the job requirements including whether or not the employee exercises his or her own judgment in the course of their duties; is able to function with minimal supervision or direction; does or does not direct the work of others; and whether or not the employee is ‘key’ to the operations of the business.
Barn Managers are most likely ‘salaried’ with broad management responsibility to keep all activities associated with managing a barn running smoothly including supervising the work of stable hands, Grooms and other barn staff, maintenance of the physical barn including safety, cleanliness, oversight for the health of all the stabled horses and like responsibilities. Although the job is on-call 24/7, the Barn Manager would not be eligible for overtime for any hours worked over 40 per week. That is not to say the Barn Manager might not receive a bonus!
The Office Manager associated with a horse business might be salaried or hourly depending on the level of responsibility necessary to do the job. If the Office Manager has light administrative duties, does not supervise the work of others, works only 8 hours per day, the role might be hourly. However, if the office work is directly related to the business operations of the employer or its customers, the Office Manager deals with important business matters and exercises his/her own judgment, the position might be salaried.
An employee may be salaried if:
- regularly supervises two or more other employees, and also
- has management as the primary duty of the position, and also
- has some genuine input into the job status of other employees such as hiring, firing, promotions, or assignments.
Supervision means what it implies, that it is a regular part of the employee's job and must be of two other regular, full time employees and ‘management’ as the ‘primary duty’ of the job’ determined on a case-by-case basis. Examples of management or supervisory activities which would qualify an employee as salaried are:
- interviewing, selecting, and training employees
- setting rates of pay and hours of work;
- maintaining production or sales records (beyond the merely clerical)
- appraising productivity, handling grievances or complaints, or disciplining employees
- determining work techniques
- planning the work
- dividing work among employees
- determining the types of equipment to be used in performing work or needed materials
- planning budgets for work
- monitoring work for legal or regulatory compliance
- providing for safety and security of the workplace.
An employee may qualify as performing management job duties even if she/he performs a variety of ‘regular’ job duties as well. In the event that some ‘management’ decisions are required, she/he is there to make them and this is sufficient to make this position salaried.
Another example of a salaried horse industry job is a Racetrack Manager or Steward. This job involves directing racetrack activities and working directly with owners, upper management and community representatives, assigning work, ensuring safety, hiring/firing employees, etc.
How should our Groom be paid?
Grooms typically do not oversee the work of others in the barn, and should typically be paid hourly, and depending on the state in which a Groom works is overtime eligible. If our Groom works in California, he/she is paid ‘OT’ for any hours worked over 8 hours in a workday + any hours over 40 per week. In other states depending on the Wage and Hour laws, the Groom is overtime eligible for any hours worked over 40 hours in a week.
California and many other states require employees be paid ‘on call’ and ‘stand-by’ time at regular, hourly straight-time pay.
So, back to my friend.
How is the employer able to require the employee to work more than the agreed upon hours per week? The time over the 25 hours per week are for employee staff meetings, trainings, and like activities and not the usual hands-on tasks required to do the job. The role is classified as a ‘professional’ occupation and staff meetings and trainings are necessary to retain the professional classification. If she were an hourly employee, she would be paid for all the time at work including staff meetings, trainings and any time at work required to do the job.
Does her job pass the Salary and Duties Test for salaried or hourly? Her wages are at least $455 per week, but her job does not involve the supervision of other regular, full time employees. Part-time jobs most often do not-it is difficult to run a business with part-time Barn Managers! Most likely her job might be hourly.
You can learn more about the Fair Labor Standards Act here, on the Department of Labor website. http://www.dol.gov/oasam/programs/history/flsa1938.htm
For Wage and Hour law information visit Department of Industrial Relations. http://www.dir.ca.gov/dlse/dlseWagesAndHours.html for California.
Please also refer to the following articles posted here, on Pro Equine Grooms, about other important employment issues:
Disclaimer: The contents of this article are opinion only and based on the experience of the article's author and not to be construed as legal advice in any respect. Consult an attorney before taking action based on the contents of this article. Marcia Hancock, Professional Equine Grooms, LLC and Liv Gude expressly disclaim all liability in respect of any actions taken or not taken based on any contents of this article.
ARE YOU BEING PAID CORRECTLY??