Your Hourly Rate

If you are employed, whether on salary or by monthly, weekly, or daily rate, your pay can always be converted into an hourly rate. Maybe not contractually – employers do not like to pay by the hour as it ends up costing them more – but you can still do the arithmetic. Simply add up the number of hours you worked during the pay-period, and divide the pay you received for it by that figure. If you’re not able to do that simple task, then you probably haven’t got a job paying anything more than mandatory minimum wage and this article is not for you.

If you have not specifically negotiated an hourly rate then you’re probably being ripped-off by your employer. A pay-cut, sugarcoated with the words “salary” or “regular pay”, has been slipped in, in the form of a reduced rate compared to what you would have got if you had insisted on being paid by the hour.

In the world of IT contracting you often find jobs offering a “daily rate”. What this phrase actually means is the following: Work eight hours or more and you will get one day’s pay. Work less than eight hours and your pay will be reduced pro-rata. On-the-job one typically finds two cases for the daily-raters – you are expected to put-in one or two hours of unpaid overtime everyday, or there isn’t really enough work to go around to make it a full-time thing and your egotistical manager doesn’t want to lose his precious FTE head-count so keeps sending you home early on mini unpaid-furloughs. A characteristic way of disguising this is, “oh we like to finish early on Fridays around here“. Which doesn’t do dick to his take home salary but hits you in the pocket, essentially consigning you to a few hours of unregistered unemployment each week.

Also we have to take into account that we only get paid for the hours we work. That’s a solid legal principle that has been tested in many courts. All agree that an employee is trading his or her “time and labour”. Unless one is being paid piecework or commission, it behooves one to work out how much each hour of work is costing you in real-time. Is it really an eight hour day? Or ten? More or less? Salary calculations are usually made on an “all-in” basis which do not include the baggage of employment, such as commuting, unpaid breaks, and personal preparation – necessary consequences of the job that go unpaid.

For example, a typical modern employee spends thirty-minutes performing ablutions, dressing and grooming for work, thirty-minutes each-way commuting, and a thirty-minute lunch break. Or, to put it another way, each paid day of work has an unpaid two-hour overhead attached to it. If you’re lucky. That is baggage of lost time where the employee is anything but “free to do her own thing”. Say two hours a day of lost time, five days a week, forty-eight weeks a year and it soon adds up. How much, based on your current hourly-equivalent pay, could you have earned or learned in those lost 480 hours each year? That’s twelve working weeks, a full quarter, that you spend going to and from work when the time could have been spent more productively. To illustrate, add another 25% to your annual take-home pay last year and that’s how much you could have been earning.

Some, of course, will argue that you shouldn’t be paid during those two hours because “the employer isn’t benefiting from it“. To those the simple response is tell them that if none of us bothered turning up for work at all, would that benefit your precious employers? The employers factor opportunity cost into their pricing, so why shouldn’t we?

They constantly bombard us every working day with corporate propaganda about how we all have to “think like a business“, but should we ever dare to show any of that sought-after “entrepreneurial thinking” vis-a-vis our own pay we are very quickly bitch-slapped back down to our status as powerless employees. Reminded how many other people would love to have our job. Usually by the hags of HR, acting as mouthpieces of management, who spend the rest of their time discussing their favorite positions for child-birth, and bragging to each other about how many imaginary “gay friends” they each have.

Was it our choice that employers could earn bigger profits if they locate their places of employment in the most expensive areas of real estate and pay us too little to be able to afford to live anywhere near to where we work? Do we really get to choose our employers, or aren’t we, when in our natural state of unemployment, supposed to take “the first suitable job that comes along“?.

Thus we enter the awful, soul-destroying drudgery of the modern workplace.

Whatever the mechanics of renumeration, one should always factor in the commuting and mandatory unpaid break-time each day. Assuming the day’s work is going to cost you ten hours in total, then the pay you negotiate for the eight hours you are at your desk should take account of that. Basically, go into the negotiations expecting 20% more than they are offering, because that is what they are expecting from you.

Don’t forget, that if you do get hired you’ll find that your line manager, and everybody above, will be able to choose to work from home whenever they feel like it (i.e. whenever they don’t feel like working and would rather nurse their hangovers). They will rarely put in more than a six-hour day in any case, since management have always counted their commuting and meals to be a paid part of their working day. You will be expected to be at your desk of course, doing their jobs for them half the time, for the full eight hours (unless they want to a save a few bob for their bonus pot by sending you home early, or having you do unpaid overtime under the tacit threat of dismissal).

You’ll also be expected to be grateful you’ve got a job at all. So don’t go giving them any lip.

Even it does turn out to be a job that, like so many of them, is mind-numbingly dull, leaves you exhausted, and only just pays you enough to cover your monthly bills.

Your working day is ten hours, minimum, not eight. So see that you get paid for all of them.


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