PME Consulting Engineers - Hourly or Salary

[PEDARRIN2]

Our PME consulting company is going salary for the engineers, who used to be hourly.

I have read various threads indicating the pro's and con's of salary vs hourly for engineers and there are merits to both; from both an employee and employer perspective.

I have been told that in the US, paying PME engineers hourly is not a typical occurance.

The last two companies I worked for in the last 15 years were hourly.

So, just to get a feel from the members of this community, I want to know, if you work for a PME consulting company, are you hourly or salary?

 

[IRstuff]

Being on pure salary exempts you from a bunch of labor laws.

TTFN
faq731-376

 

[GregLocock]

While I haven't got the faintest idea what PME is I'm intrigued to hear what the advanatages are to an employee by going to salaried employment /in current practice/.

Cheers

Greg Locock


New here? Try reading these, they might help FAQ731-376

http://eng-tips.com/market.cfm?

 

[cvg]

in good times, employers want everyone on salary and then will demand we all work harder and put in extra effort to get our utilization up higher and increase net revenue. The result is everyone works 50 hour weeks and gets paid for 40 hours.

in bad times, employers want everyone on hourly so they can reduce labor costs without laying people off. The result is everyone works 32 hour weeks except when there is a deadline and then everyone works 60 hour weeks. The salaried folks just get furloughed.

there is no net benefit for the employee is there?

 

[PEDARRIN2]

PME is plumbing, mechanical, and electrical - sometimes fire suppression and technology

 

[cvg]

Always heard it was MEP, the mechanicals like to be listed first...

 

[Ron]

Do I get on my soapbox yet again about engineers and professional status?

I'll shorten it.

We are engineers. It is a PROFESSION not a trade. When we work hourly, we subvert the professional status in many ways. In my opinion, engineers should be on salary, should work the amount of time required to show professionalism and a commitment to the profession, and should not bitch about being paid for 40 hours but working 50. I've been doing it for 36 years, I'm proud to be an engineer, I've always been on salary (except for the last 7 years of running my own business), I've always been underpaid if compared to an "hourly worker", but I think engineering is important to the public good and should be considered and treated as such.

Jumping off soapbox.

 

[behindpropellers]

Ron,

If your boss came up to you and said you were going to work 55 hours a week all year on your current 40 hour salary, what would you think?

I have been contracting for the past 6 months. It sure was nice in the summer when the project was slow and I could work on some other projects. Now it's nice when I have worked 7 days a week on this project to keep it on target.

With the newer management practices I'm not sure if your thoughts "We are engineers. It is a PROFESSION not a trade." hold up. My wife works as a speech pathologist, paid hourly. Is her career a trade or profession??? To be a speech pathologist these days you need a doctorate, FYI.

Tim

 

[PicoStruc]

I will disagree with Ron here,

Yes I am a professionnal, but I am still a employee is a corporation and paid that way too !!!. I don't have the freedom of other liberal profession.

I don't have to gift my employer with free work time.

Here in canada, as a professionnal, the client is in fact by definition "my employer" and not their clients !

 

[monkeydog]

I am with Ron on this one.
I am salaried, work more then 40 hours a week, log my hours in every day.
The good news is my company bills our customer for every hour I work, regardless if I get paid for it or not.

It is a win situation for my company.

Maybe if I work real hard and show my professionalism, my company will reward me with a baseball cap, or a jacket 2 sizes too big with the company logo on it.

 

[cvg]

not sure that this thread had anything to do with professional status. I have worked both hourly and salaried and always tried to act professionally. An employee's choice to act professionally has nothing to do with any agreement between employee and employer on method of compensation. The majority of engineers are employed by others, they do not own a business and so there may be no choice. I have no interest in demanding that my employer change me to "salaried exempt" from "hourly exempt" just so I can appear to be more professional. By the way, not all of our clients know the difference, they are not generally given this information which is generally considered to be confidential, and billing is handled the same way regardless of my contractual status with my employer. In fact I would suggest that some of the more highly esteemed "professionals" work only as contractors on our projects, they get paid hourly at exhorbitant rates.

to answer the original post, I have been both hourly and salaried and then back to hourly over the last 25 years. Never had any choice in the matter and the choice of method was always determined by my employer to benefit them in some way. Recently got switched back to hourly and I feel it also benefitted me as I was able to remain working unlike other salaried folks who are currently unemployed.

 

[Ron]

If your boss came up to you and said you were going to work 55 hours a week all year on your current 40 hour salary, what would you think?

I would think exactly the same as I have done for the past 36 years...My salary is what it is and I'll work the hours I need to for the benefit of all. 55 to 60 hours a week was normal and stayed that way for many years. My choice. When I was on a salary working for a corporation, I worked as needed. With that came a lot of freedom to do what I wanted and there was no quibbling if I wanted to leave work at 3 to go to my child's baseball game or some other function...or if I just wanted to leave. I was usually at the top of my salary range and got promoted to responsible and rewarding technical positions throughout my career. Part of that was because I put a lot of effort into the project, part of it was because I made the effort to learn more about the technical aspects of my job and stay ahead of the next guy and the competition, part of it was because I enjoy the challenge of taking on new stuff...but none of it was because I whined when I had to work extra hours.

I now enjoy the benefit of charging a nice hourly rate to do consulting. I get to keep the amount I bill, except I now have to pay my own insurance of all types, I pay for my office and every other expense necessary to run a business. What's left I keep.

When I was in a corporation, before I started my first company, I had the same reservations about salaries, billing rates, and corporate profits that all "staff" level engineers have. As I came to understand more about what goes into developing billing rates and ultimately the salaries of the billing professionals, I developed an appreciation for all the minutia of expenses and how the revenue must be sufficient cover those expenses and add a little profit on top of that.

Many staff level engineers see their salaries, see the billing rates and think there is a great disparity between the two and that the difference between them goes straight to the owner's pocket. Not so. Not even close. A well run engineering firm will yield after-tax profit of usually less than 10 percent. A small engineering firm can sometimes make more profit and individual practitioners can often make nice profits...but there's a lot more personal risk for each.

 

[mtu1972]

If being salaried truly offered the flexibility that Ron notes, that would be great. In my experience it does not. My prime example was being part of a corporate engineering department for a Fortune 500 manufacturer. I worked 50 to 60 hours per week as the job and project schedules demanded. When I asked our boss if I could leave early one day a week to coach my son's youth basketball team he said no as it would set a bad example to the hourly drafters. Even when I said I would come in early so as to be in the office the required 8 hours per day. So the kids had to take the school bus home and have a parent drive them back to school for BB practice.

My other experience was with a small structural consulting company. We worked 6 days a week at the office and were expected to work out of our briefcases (before laptops) nights and Sundays. No holiday on Good Friday as this was a day "when we can gain on the Architects that are taking the day off".

No thank you! 14 of my 39 years were salaried. The last 12 have been hourly and I have much more freedom to make plans for the weekends and through the upcoming months etc.

Take your bonus and divide by your hours over 2080 and see how badly you are getting screwed. Or take your total compensation and divide by your total hours. I did and I would never work as a salaried employee again.

gjc

 

[JedClampett]

I've worked quite a while (30 year plus) and both companies paid us on a salary basis, hourly. We were paid a salary, but whatever we worked extra was put on timesheets and was paid as compensatory time (current company) or straight time overtime (previous employer). My current company pays us for accumulated compensatory time once a year. I strongly suspect their motivation is that, since they bill most of the projects as time and materials, that they want us to track our hours over 40 a week. Otherwise, they couldn't bill the clients for them. Moreover, the clients wouldn't be too crazy about paying for hours that the company wasn't paying their employees for. If we ran out of work, they'd have to pay us after we've exhausted our comp time hours and our vacations.
I don't know how this all works out with the labor laws and such, and frankly, it seems like a pretty sweet deal for all involved, so I'm not complaining. Note that an hour charged over 40 is more profitable for the company, since they base their overheads on a 40-hour week.
I put in many extra hours for training, travel and working from home, so I don't feel a bit bad about this setup.

 

[TD2K]

While I'm technically salary (so my supervisor insists), I have to charge 40 hours a week if I want a full paycheck. Work 32 hours and that is what I get paid for. If I work 60 hours, I get paid for 60 hours at my regular hourly rate. That's not salary to my understanding but I suspect it gives the company a way around not having to pay me time and a half which I'm okay on.

 

[DHambley]

Lawyers bill by the hour. Their job is classified as a profession not, a trade. Engineering contractors should view it as the same. Employees are a different story: You work for the firm as part of a team and work as many hours as needed to get your product out of the door. If your firm expects you to work as such but, does not treat you as part of the team, then they aren't professional.

 

[berkshire]

Many years ago, I was working , on Salary, for a company in New Jersey. We had been burning the midnight oil on a project that my boss was putting an almost impossible deadline on. The result was that not all of us myself included were getting to work on time.
The boss got annoyed at seeing people slip in 5 or 10 mins late and announced the henceforth he was making everybody hourly.
So we all turned our timecards in that week which included the overtime.
The next week we were back on salary.
B.E.

"A free people ought not only be armed and disciplined, but they should have sufficient arms and ammunition to maintain a status of independence from any who might attempt to abuse them, which would include their own government."
-George Washington, President of the United States----

 

[msquared48]

If you are an employee, a luxury for some (like me for example) in today's marketplace, you can be either salaried or hourly, but not so if you are a consultant. That is always hourly from my experience.

Mike McCann
MMC Engineering

http://mmcengineering.tripod.com