Robert, your view of interns is interestingly legalistic.
"A typical intern does not meet the criteria for being on salary. They do not manage other employees, they cannot exercise independent judgement (we had this conversation with members of our state licensing board who reminded us that only registered architects exercise independent judgement) and they do not manage aspects of the firm's business."
Wow! I never viewed professional employees that way. I have always seen hourly versus salary as the difference between a guy flipping a burger and a professional. The employers pact with the burger flipper is simple: you are here, you do your job, I pay you. Stay longer than 40 hours, get overtime. Smoke break, lunch break, arrive late, sick kid....I don't pay you.
I know legally the definition above is correct but with a salaried employee, at least in my eyes, there is much more complex contract, more adult. I pay you a base amount of money a year upon which we have agreed. On top of that I am paying 100% of your healthcare. I pay you over 30 days leave a year (vaca, sick, holiday). I pay you for bereavement leave. I pay for your AIA membership. I pay for your exam. Your kid gets sick, I say go home early. Christmas eve? Let's have brunch and go home. Good Friday? Leave at lunch. 4th of July is Tuesday? Make it a 4 day weekend. In at 8:45? I am not concerned. Longer lunch, that's ok. I treat my employees like professional adults, I alow them to use their independent judgement for their time management.
Normally with us most people, especially junior people, work 40 to 43 hours a week. That time includes the morning coffee klatch, birthday parties, personal phone calls etc. The fundamental I expect in return is that when there is a deadline, when some client suddenly has an emergency, my people are there, willing to jump in and help, doing whatever it takes to get the job done. A more important benefit from treating people fairly and like adults is that I have unusually high employee retention. In the past 5 years the only employees who have quit did so because they were moving out of the area for family.
What I deeply resent with myopic regulations like this is that it treats all employers like they are Simon LeGree. Ironically, in our case it is threatening to turn us into that sort of employer. I have no problem with people chatting in the kitchen for 15 minutes because I know it all balances out in the end. If I am forced to pay over time, suddenly I am hall monitor and at 8:30 one had better be in their seat working. This sort of monitoring crushes the spirit of a great office. I either have to suck it up and pay people overtime because they are use to an easy going management style or I have to be, as I have had an employer be, a time monitor. Making certain people are in their seats working, no personal calls, up at 12 for lunch back in their seat at 1. Breaks quick, efficient and back in your seat.
Are there firms that abuse interns? Absolutely. I worked for one where my boss would literally scream at people who were unwilling to pull all nighters. Every week there were tears in the halls and restrooms. In my mind the solution to this is to vote with your feet. If someone works for a bad company, simple: leave. Instead, with a additional bureaucratic regulation the government is slowly choking small business out of business. As I mentioned above our health care costs are up well over 100% (100%!!!!!!!!!!!!) in just two years and every white page I read says this year is going to be worse. Interns coming out of school are asking for a base salary one third higher than pre-recession. Now we have the burden of tracking, monitoring and paying for overtime. Additionally fees are not going up anywhere near the same rate. Another irony is this is the same government that kicked our profession hard in the 1970's over fees which has led to most of us making much lower percentages than we did.
My frustration with all this is that it is getting harder and harder to be the good employer. For us, the firm owners would definitely make more money if we fired a bunch of staff and did less work. I never wanted to be the employer who views employees as a line item on a spread sheet but the government is pushing us in that direction.
------------------------------
Nea Poole AIA
Principal
Poole & Poole Architecture, LLC
Midlothian VA
Original Message:
Sent: 05-20-2016 17:28
From: Nea Poole
Subject: New Overtime regulations
The new overtime regulations from the Obama administration are brand new this week and many firms must be grappling with how to deal with this quantum change. I know the last firm for which I was an employee expected interns to be working a minimum of 50 hours a week. Our firm does not expect this but there are certainly weeks where interns put in more than 40 hours to help with a deadline. Historically we have rewarded this with additional holidays (July 4th is on Wednesday....we'll close Thursday/Friday) and very generous bonuses. Additionally, being salaried, not hourly allowed a flexibility of schedule.
This coupled with the incredible increase we have seen in healthcare costs, for us more than 100% in two years for much less desirable insurance, puts the leadership of our firm of 26 in a unexpected and untenable position. Fees are not increasing anywhere near the level salaries and expenses are. This new regulation is the cherry on top. Our firm has projected that doing less work with our most capable people would garner us more profit; so is that what we do, fire 15 because we are drowning in regulatory expenses?
Our firm does multifamily, which is booming, but as I mentioned fees are not keeping up. I have no answer but would appreciate any thoughts others have.
Thanks.
------------------------------
Nea Poole AIA
Principal
Poole & Poole Architecture, LLC
Midlothian VA
------------------------------