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This was posted on Garrett Miles's blog on AIA KnowledgeNet. I wanted to share and get your feedback. The original post can be seen here: Hourly vs. Salary

What is the conventional wisdom regarding whether an employee should be salaried, or paid hourly?  Most firms I'm aware of start new interns with an hourly wage, then transition to salary as soon as they're bumped to the next tier on the org-chart.  

What is the policy at your firm? 

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Ann Harris
The American Institute of Architects
Washington, DC
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From my experience at my firm, the transition from hourly to salary comes when the intern has demonstrated their dedication, shown that they are hard working and willing to go the "extra mile" and show a grasp of the big picture... not necessarily when promoted from "drafter" to "job captain" or "project manager", but definitely when they are seen to be a dependable asset to the firm.  It can be a deceiving transition, though - there is a prestige or sense of accomplishment/permanence when put on salary, but the loss of time-and-a-half overtime hours can result in the intern making less money for the first few years.

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David Bell AIA
PJHM Architects, INC.
Laguna Hills CA
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Ann,
Your question caught my attention because I had heard the same thing until our firm took a careful look at the Federal and State labor laws.  If you simply follow "the org-chart" you could end up on the wrong side of the law in a hurry.  The key is to make sure that your org-chart, and the "duties" and freedoms that go along with the bump to the salaried level, align with your state and federal requirements for salaried and non-overtime employees.

Here are links to the overtime rules for

Pennsylvania: http://www.portal.state.pa.us/portal/server.pt/community/labor_law_compliance/10515/overtime_rules_in_pennsylvania/553571
and...
Federal: http://webapps.dol.gov/dolfaq/go-dol-faq.asp?faqid=320

I fear too many interns are "promoted" to a salary level because it saves the firm paying them overtime, but they aren't really given the autonomy and self-directed freedom at work that is required to meet the legal definition of an exempt employee.
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Richard Linsky AIA
Associate
Nalls Architecture, Inc.
Narberth PA
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