Unclear on the Concept

I have started subscribing to Shark Tank, a daily IT story (blog) from ComputerWorld. Yesterday's story was about billable hours:

This consulting business analyst has been working on one client account for over a year. That's meant lots of long weeks and weekends, reports a pilot fish on the scene.

"While auditing plans recently, we discovered that this business analyst has had quite a lot of date changes and task completions that are on the plan but with no corresponding time on the billing system," fish says. "Since our project planning and billing systems are not integrated, this is something that would not be apparent if we weren't comparing plans and billing."

When asked about the discrepancy, analyst tells boss, "Well, since you don't pay me for working on the weekends, I figured I did not have to enter the time on the billing system."

Which doesn't make the analyst's boss happy. The accounting department is even less happy when a little number crunching calculates just how much time is involved. Sighs fish, "We haven't billed the client for 500-plus hours of work. "Now we're wondering exactly how to approach the client."

Helloooooo?!

The first comment to the story sums up the real problem very nicely:

Note the base assumption - the consulting firm gets paid for overtime and weekends, but the money is not passed to the consultant who did the work.

So far, there have been 9 comments. Not one is in sympathy with "the boss", the accounting department, or the consulting firm.

Rich's comment is more blunt. He says "this is stealing". I agree. If you're billing by the hour, and tracking by the hour, you should be paying by the hour. There's a disconnect involved when you do the work in a putative "40 hour" work week and then try to turn around and split that work up into more than 40 billable hours. The two sides don't match up. Someone is going to get hurt in the deal.

The sad truth about salaried employees is that they are paid the same salary no matter how many hours or days they work. The legal fiction is that salaried employees work 40 hours a week. The nasty reality is that many salaried employees work 45, 50, 60, or even more hours per week. Any hours over 40 are frequently expected (by management) and rarely compensated.

On the flip side, management is not supposed to track the actual hours worked by exempt employees. And, if you get your work done in less than 40 hours, you still get paid for the full week. Not only that, but anything over 4 hours counts as a full "day", from a legal perspective. Exempt, salaried, "professionals" are expected to be able to budget their time.

I was unusually lucky in my first full-time "real" job. I got a manager who believed that employees were paid for 40 hours of work per week.

I had a long and congested commute for the first three months (until we moved). When I found a van pool that would solve the driving hassles but would have me on site for at least 9 hours a day, I made a deal with my manager. The result was that I vanpooled 4 days a week; on Wednesdays, I slept in, ate lunch at home, then drove in for a half day of work over fairly empty freeways. The total: 40 hours and considerably less stress.

When I had to leave that job, the next one was again a long distance from home (albeit over a less highly-traveled route). When I inquired about a flexible work schedule, my new project lead replied that many employees worked 60 hour weeks. I responded that it was a sad thing for so many employees to have no life or family...

Spouse has been working as an independent contract programmer through most of his career. There are two very positive aspects to a contract situation: the first is the ability (usually) to file a schedule C at tax time. The second (always) is hourly billing. Or, as Rich says "Yes, I worked 12 hours today, but I'm getting paid for all 12 of them."

If you are on salary and exempt from overtime, you can sometimes fight back. It helps if you're a productive, well-organized worker. As long as you get your work done, it isn't supposed to matter how long it takes and management should not be tracking your hours. That's the positive side of the 40-hour legal fiction; it can actually be less than 40 hours. (The downside is that there are no laws protecting you from being asked to work more...)

Even in the case of a consulting firm, where hours need to be tracked for the client, there's still hope. Just be honest. The following comment, posted to the Shark Tank story, says it all:

Back in the 70's, I was working on a contract that my boss had estimated. Working on week-ends and evenings, I was averaging 56 hours a week (while salaried). My boss asked me to NOT record more than 40 hours/week because then the job would come in as very profitable, and reflect well upon his estimating skills. OK, I just started working 40 hours/week and recording 40 hours, which caused the job to come in 3 months late and well over the estimated hours. Sometimes it's best just to leave geeks alone...

Be careful what you ask for. You just might get it.

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A useful FAQ regarding overtime work by exempt and non-exempt employees, is available from the Fair Measures website. Fair Measures provides answers and training in basic employment law for both managers and employees. Some relevant articles:

• Can employer force exempt employees to use time clock?
• Can employer require us to falsify time records?
• How many hours per week can a salaried employee be required to work?
• What law protects overworked semiconductor engineers?