Consulting/contracting as an exempt
 

Being relatively new to the consulting racket, I have a question WRT an overseas engagement that required a substantial amount of overtime.

Let's say you're an exempt employee for a consulting firm, and you are on an open-ended contract with a customer. They have an overseas facility, and you have to travel there to help with a software installation.

When it becomes apparent there will be a lot of work required, the project manager shows up at a status meeting and informs the contractors (multiple companies) to keep track of their hours as they've gotten overtime approval from each company. You end up putting in an additional 40 hours over the 2.5 weeks.

I didn't want to do a poll because I was interested in hearing different viewpoints, but after you get back, in terms of compensation, would you expect:

- Some flat bonus amount
- 40 hrs pay, hourly rate generated by your pro-rated salary
- Nothing, you're exempt
- other?

Re: Consulting/contracting as an exempt
 

By straight definitions, this becomes a very grey area. You are an exempt employee of the consulting firm, but not with regards to your customer. To your customer, you are a contractor at hourly rates.

I have been in this type of position before and was always paid (and expected) time and a half.

If I need to do something for the consulting firm above and beyond, ie, go to the office to fill out forms or something, this is where I was on my own dime and did not expect pay.

In this situation, I expect 40 hours at time and a half.



edit: plus expenses.

Re: Consulting/contracting as an exempt
 

Also, the term 'exempt' gets abused over and over in the computer industry. Here is how the Department of Labor has defined it:

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Computer Employee Exemption

To qualify for the computer employee exemption, the following tests must be met:

* The employee must be compensated either on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour;
* The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below;
* The employee’s primary duty must consist of:

1) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;

2) The design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;

3) The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or

4) A combination of the aforementioned duties, the performance of which requires the same level of skills.


----------------------


These are engineering type roles and very few support roles would ever fall into exempt status if it came to challenge.

Re: Consulting/contracting as an exempt
 

Cliffs notes: Don't expect overtime pay and probably don't ask for it (unless that's the culture in your company).

This is my working arrangement - I work for a consulting company and am an exempt employee. Actually, my wife is, too (for another company). My situation is I don't get overtime. My wife gets straight time. I don't expect to get any sort of overtime pay for work over 40 hours, since that's my arrangement. However, when it's known ahead of time that there'll probably be a some overtime, we (my company) write it into the contract that significant or continuous overtime gets billed to the customer at time and a half. I don't get any of that, but I have been told "we'll see if we can get you some of that" by our contracts guy. I say "alright (whatever)" and I don't expect to get any of it and I don't ask for it, as my job's not really a "put in your 40 and go home" kind of job. In the end, it boils down to me not getting any of the extra cash directly, but it tends to make a good impression when it's time for reviews or a bonus.

Now traveling is different - not for overtime, but all expenses plus some sort of per diem. If you're a single guy renting a place, this could be a pretty sweet deal to go on-site somewhere for an extended period of time - free rent (usually somewhere pretty nice) and per diem on top of your salary makes it pretty nice.

My wife gets straight time for her overtime, but that's the arrangement she has with her company.

Of course, this is all engineering, so it's probably different for your field (assuming it's not engineering).

Re: Consulting/contracting as an exempt
 

oT,

Generally a consulting firm will have some policy for salaried employees putting in >x hours at a customer site.

In a situation like you describe, I've seen the compensation range from a "great job!" to a pro-rated based on salary bonus for all extra hours worked.

Without any specific policy in place, I wouldn't expect much of anything here for working 40 extra hours over 2.5 weeks.

Re: Consulting/contracting as an exempt
 

[ QUOTE ]
Without any specific policy in place, I wouldn't expect much of anything here for working 40 extra hours over 2.5 weeks.

[/ QUOTE ]

I'm very surprised to hear you say this. This has been a very hot topic in CA over the past 5-10 years with major corporations such as BofA, Pacbell, Starbucks and others all settling lawsuits for multi-millions.


OT, I suggest you run yourself through the Exempt/Non-Exempt wizard at HRCalifornia.


I really doubt this will end up being an issue and once your hours are reported, you are going to get a fat check cut and be happily surprised.

Re: Consulting/contracting as an exempt
 

All:

Thanks for the feedback. I have been an exempt employee for various companies for the entirety of my so-called "professional" career. Were I an employee of the customer, I would not have expected any additional compensation (and indeed, the regular employees who went on the trip did not receive any) so the PM telling us that they'd gotten approval from our respective companies for OT was an, "Oh. Cool." kind of thing.

PdPG:
[ QUOTE ]
Don't expect overtime pay and probably don't ask for it (unless that's the culture in your company).

[/ QUOTE ]

This was an extraordinary circumstance, so I don't know what culture exists. Also, I may be nitpicking, but I wouldn't have asked about it had I not been told about it in the first place.

ED:
[ QUOTE ]
Without any specific policy in place, I wouldn't expect much of anything here for working 40 extra hours over 2.5 weeks.


[/ QUOTE ]

In your experience, do the extra hours vs. total hours factor in here? For the sake of discussion, what if it was 30 extra hours over 1 week?

BT:
[ QUOTE ]
I really doubt this will end up being an issue and once your hours are reported, you are going to get a fat check cut and be happily surprised.

[/ QUOTE ]

I am 99% sure this will not be the case, as I'm still trying to get my expenses reimbursed.

Re: Consulting/contracting as an exempt
 

oT,

"In your experience, do the extra hours vs. total hours factor in here? For the sake of discussion, what if it was 30 extra hours over 1 week?"

Yes, that matters. BTW, I'm assuming that your "extra" hours were based on a 40-hour normal week. So, putting in 50-55 hours in a week is not something I'd expect any extra for as a salaried employee. That just goes with the territory. Putting 70 hours in when a normal workweek is 40-50 hours is a different story and I'd expect some sort of bonus or time off or whatever.

Re: Consulting/contracting as an exempt
 

BT,

"I'm very surprised to hear you say this."

Most professional salaried jobs involve working more than 40-hour weeks. That holds for whether they are office jobs with a company or service jobs (accountants, lawyers, consultants) where you are doing work that is billed out to clients. Working 50-60 hours is very standard at a lot of places.

Re: Consulting/contracting as an exempt
 

The consulting company is certainly going to bill the customer for the additional hours.

How is this just a windfall for the consulting company?

This is why it is such a grey area.

Re: Consulting/contracting as an exempt
 

[ QUOTE ]
oT,

"In your experience, do the extra hours vs. total hours factor in here? For the sake of discussion, what if it was 30 extra hours over 1 week?"

Yes, that matters. BTW, I'm assuming that your "extra" hours were based on a 40-hour normal week. So, putting in 50-55 hours in a week is not something I'd expect any extra for as a salaried employee. That just goes with the territory. Putting 70 hours in when a normal workweek is 40-50 hours is a different story and I'd expect some sort of bonus or time off or whatever.

[/ QUOTE ]

I agree with this.

The chronology was:

Week 1, slightly heavy, toward the end of the week, PM tells us the next week is going to be big, track your hours (just under 60).

Week 2, Nutso, half-day Sunday, almost full day Saturday (70).

Week 3, Hand-holding the last two days. Also, the trip was initially supposed to be one week, then got pushed to two weeks, then got pushed to include the last two days.

[censored]. It was 50 hours in 2.5 weeks. Maybe I'm being penalized or sucking at math. [img]/images/graemlins/crazy.gif[/img] Anyway, thanks again all for the discussion. I'm going to start looking for a new job...

Re: Consulting/contracting as an exempt
 

BT,

"The consulting company is certainly going to bill the customer for the additional hours.

How is this just a windfall for the consulting company?

This is why it is such a grey area."

I really don't understand what you are talking about here.

You sound like you are talking about contractor type work where people are compensated on some sort of hours-based billing w/ hourly rates.

When working in professional consulting, accounting, legal, and other fields, it is not unusual for salaried employees to bill more than 40 hours in a week at rates that are far higher than their salary.

The "windfall" to the consulting company goes to their profits, which go to their shareholders or partners, which is why there's this whole striving to make partner rat race mentality, since that's where all the money goes.

There is really no grey area at all. This is how it goes. As I mentioned, there are often bonuses or other compensation for extraordinary efforts, but billing out a lot more $$$ than what you get paid is just a standard part of this career track.

Re: Consulting/contracting as an exempt
 

The grey area imo is with regards to "Computer Consultants", which is a term that gets tossed around in the industry like a kids toys.

I have personally never been listed as anything but 'exempt', but have always been compensated for scheduled overtime. A trip overseas would certainly fall into this category imo.

There are very few positions in the computer industry, especially in a consulting and/or support role, that would pass the test of being an 'exempt' role. Salary != Exempt even if inexperienced HR rep's categorize it as such.

Without knowing more about it, on the surface, the OP's position does not sound like a managed service wherein the consulting company is charging x-amount of dollars, flat-rate, for a specific service. It sounds much more like every other contract computer support position I have come across where the consulting firm is providing a body at x-amount/hour.

If that is the case, the OP is certianly due time and a half for this scheduled overtime and if challenged with the CA Labor Board, I am just about positive that this would be the case.

Very few ever do this of course due to the fact that it is not exactely great for the relationship with your consulting company, and luckily, I have never had to, but I do know a handful of people who have and the outcome was always in their favor.

Re: Consulting/contracting as an exempt
 

BT,

OK, that's what I thought. What you're talking about is body-shop contractor type stuff. What I'm talking about is professional services firms. Both charge clients by billing people by the hour, but they are very different types of companies.

Re: Consulting/contracting as an exempt
 

[ QUOTE ]
OK, that's what I thought. What you're talking about is body-shop contractor type stuff. What I'm talking about is professional services firms. Both charge clients by billing people by the hour, but they are very different types of companies.

[/ QUOTE ]

Yeah, I think this is supposed to me more like the latter.

The idea is the company is supposed to be more like EDS than some staffing agency, although it is still very small.

The root of the problem, as I see it, is the lack of a clearly stated policy + poor communication regarding what is being done to develop a policy. Ah well.

Re: Consulting/contracting as an exempt
 

I'm not sure that I am agrueing my point very effectively.

My main point is that is does not really matter who or what the company is or thinks they are, exceptions to California's overtime laws are clearly defined based on the work being perfomed and more so on the level of expertise required to perform such a role.

Clicking on exemptions pertaining to 'Professional' roles, we find that the in order to qualify for exemption from overtime laws, the employee must meet the following:


-----cut/paste------

professional exemption

A person employed in a professional capacity means any employee who meets all of the following requirements:

1. Who is licensed or certified by the State of California and is primarily engaged in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting, or

2. Who is primarily engaged in an occupation commonly recognized as a learned or artistic profession. "Learned or artistic profession" means an employee who is primarily engaged in the performance of:

1. Work requiring knowledge of an advance type in a field or science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes, or work that is an essential part of or necessarily incident to any of the above work; or

2. Work that is original and creative in character in a recognized field of artistic endeavor (as opposed to work which can be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination, or talent of the employee or work that is an essential part of or necessarily incident to any of the above work; and

3. Whose work is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical, or physical work) and is of such character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.

3. Who customarily and regularly exercised discretion an independent judgment in the performance of duties set forth above.

4. Who earns a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. Full-time employment means 40 hours per week as defined in Labor Code Section 515(c).


Regarding the requirement for the exemption to apply that the employee "customarily and regularly exercises discretion and independent judgment," this phrase means the comparison and evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered. The employee must have the authority or power to make an independent choice, free from immediate direction or supervision and with respect to matters of significance.

For the learned professions, an advanced academic degree (above the bachelor level) is a standard prerequisite.

For the artistic professions, work in a "recognized field of artistic endeavor" includes such fields as music, writing, the theater, and the plastic and graphic arts.

------end cut/paste------


Also note that when applied specifically to the Computer Software field, the labor code specifically lists functions which do not qualify for exemption status, one of which being:


[ QUOTE ]
The employee is engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment.

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The easiest way I know to describe being qualified for an exeption from the overtime law is if nobody else can easily perform your tasks without formal education and in the computer industry, these positions are few and far between.

Re: Consulting/contracting as an exempt
 

BT,

There are plenty of other exemptions from overtime law.

For example, most salaried workers making over $100,000 per year are exempt.

Here are more exemptions for computer jobs:

http://www.dir.ca.gov/dlse/Glossary.asp?Button1=E

"employee in the computer software field

Except as provided below in paragraph 5, an employee in the computer software field who is paid on an hourly basis shall be exempt under the professional exemption, if all of the following apply:

1.

The employee is primarily engaged in work that is intellectual or creative and requires the exercise of discretion and independent judgment.
2.

The employee is primarily engaged in duties that consist of one or more of the following:
* The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications.
* The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to, user or system design specifications.
* The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.

3.

The employee is highly skilled and is proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering. A job title shall not be determinative of the applicability of the exemption.
4.

The employee’s hourly rate of pay is not less than $41.00 [the rate in effect on September 19, 2000]. The Division of Labor Statistics and Research shall adjust this pay rate on October 1 of each year to be effective on January 1 of the following year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers. Click here for adjusted rate information (pdf) (doc).
5.

The exemption described above does not apply to an employee if any of the following apply:
1. The employee is a trainee or employee in an entry-level position who is learning to become proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, and software engineering.
2. The employee is in a computer-related occupation but has not attained the level of skill and expertise necessary to work independently and without close supervision.
3. The employee is engaged in the operation of computers or in the manufacture, repair, or maintenance of computer hardware and related equipment.
4. The employee is an engineer, drafter, machinist, or other professional whose work is highly dependent upon or facilitated by the use of computers and computer software programs and who is skilled in computer-aided design software, including CAD/CAM, but who is not in a computer systems analysis or programming occupation.
5. The employee is a writer engaged in writing material, including box labels, product descriptions, documentation, promotional material, setup and installation instructions, and other similar written information, either for print or for onscreen media or who writes or provides content material intended to be read by customers, subscribers, or visitors to computer-related media such as the World Wide Web or CD-ROMS.
6. The employee is engaged in any of the activities set forth in nos. 1 through 4 above for the purpose of creating imagery for effect used in the motion picture, television, or theatrical industry."

Re: Consulting/contracting as an exempt
 

Ai ya...scheduled for another trip in two weeks. If we get into a similar situation, I am tempted to just submit 40 hrs every week (of course, I won't, unprofessional, yadda yadda doormat yadda yadda). [img]/images/graemlins/mad.gif[/img]

Re: Consulting/contracting as an exempt
 

Update:
One of the other consultants on the trip didn't get paid for the OT as a result of a billing problem which led the customer to ask me if I had been paid for the OT. I said that I hadn't and explained the situation. The customer went back to look at the invoicing and they must have bitched to my company because I got called in to the office and was handed a bonus check soon thereafter.

Still looking for a new job, though...

Re: Consulting/contracting as an exempt
 

[ QUOTE ]
Update:
One of the other consultants on the trip didn't get paid for the OT as a result of a billing problem which led the customer to ask me if I had been paid for the OT. I said that I hadn't and explained the situation. The customer went back to look at the invoicing and they must have bitched to my company because I got called in to the office and was handed a bonus check soon thereafter.

Still looking for a new job, though...

[/ QUOTE ]

glad they did the right thing.