An ethics question


I'm the LD for a non-profit venue (non-union) and they consider me exempt from overtime. I'm paid a salary and I can accept my exempt status. What's bothering me is that they charge clients time and a half for my labor after 10 hours.
In my mind, the purpose of time and a half is to provide fair compensation to an employee for putting in the extra effort. Clients assume that part of this charge goes to the employee and, frankly, I somewhat resent not receiving it after a 16 hour day.

Morally speaking, is there something wrong with my employer profiting from overtime charges for an exempt employee?

Thanks for your opinions...


Active Member
Yes and no, If you signed a contract agreeing to it then I guess not. I would be upset by that, but where I work currently if someone rents the space they charge like 12.00ish/hr to have me there its like 45.00ish/hr for our td. I only make 5.85/hr no matter what. If I were you I would approach your manager about the issue as I would not agree with it.


Senior Team Emeritus
Premium Member
It's never really ethical to compare what one is charging as compared to what they are paying you than get upset over it with the person paying you what you asked for. Kid of like buying a car from a dealer, you kind of get taken for a ride or sit in the front seat.

I’m salary also and for the last five months have been putting in somewhere between 60 and 80 hours a week non-stop. On the other hand, for the last seven months since I got my raise, I have been only working about 40 to 60 hours a week and sometimes less. When I find myself in need of a day off or what ever, I when not busy once in a while take it without it counting against vacation or sick days. This the same with leaving early for the day occasionally or coming in late without a problem. It’s part of the concept in not punching the clock. At times I take stuff home to work on, and other times I baby sit the place while doing my own thing.

That flexibility of schedule and constant pay is what sent me towards doing salary. I don’t mind doing the work just like better an expected pay every week with perhaps an occasional but rare bonus check, but at least a specific budget that will never fall short when slow. I also don’t have to worry about blowing the budget or having a short week and still meeting the mortgage. Yep, I as a concept loose money when ever I work over time as a theory, such is part of the incentive for getting stuff done efficiently and correct the first time or in having a good contract that already compensates for beyond normal hours work. For me at least or as implied, such salary pay is based upon both a normal week plus expected average overtime already calculated in and agreed upon within reasonable or specified limits where for some after a certain amount of hours you might be able take some hours off during to make up for the as it were overtime above and beyond. At some point I might go in for another raise in pay to balance out this newer amount of overtime and need to do so, but normally every other year I just mention it’s time for a raise and a few thousand dollars a year is tacked onto the salary. I’m there and would do what’s needed anyway, my salary is just sort of a retainer in me doing my normal work plus what ever falls beyond that.

No, as salary you don’t get extra pay for overtime, on the other hand if you find yourself working a lot of it - irrespective of what the venu is charging for your time, than when it’s time to negotiate your contract you might ask for more in salary pay. This or perhaps after a certain amount of hours in a week negotiate a bonus above the salary pay to balance it out and the theater will be the one falling short in losing money on you if not as busy next year. Or go to being hourly but expect that it will than get complex in not paying for your out of the theater hours work in design which than would require a specified per show design pay. As a designer, it more or less is a flexible type of thing best as salary or fee. What the venu charges for your labor is not really any of your business just as I certainly don’t get paid what the company charges for my even normal before after hours labor to clients. For me at least, I’m always busy so something that is last minute or a rush no doubt gets figured into some overtime scale for paying me even if I don’t see it. Makes up for paying me when I’m not so busy. Sometimes on the other hand when I run over on a project, we have to cut down that paperwork part of the expected wage to the client to match up with the quote. This adds flexibility in what can be charged and is none of the client’s busness in the venu charging for an hourly wage and overtime even though my wage is set.

It all balances out in the end or in being taken advantage of for what you expected in hours what you are paid. Means either your contract is not so good for you or was broken in what if anything was specified in what’s expected of you. Otherwise if the salary is not working out so well, figure hour normal hours than perhaps negotiate in some form of show pay or peridium where by dependant upon the scale of the show in the more of them there is you would work extra hours over what you would otherwise work in more normal shows. On the infrequent show I do, I get paid show pay, and if away, make peridium above and beyond the salary and show pay. That’s part of my own contract but I don’t do many shows. Peridium food/expenses if after say 12 hours, and show/design pay for each design would not be bad in adding into a normal expected work week salary out of fairness.


Active Member

I believe that most states have laws dealing with when you have to get paid overtime. So look into that.



Senior Team
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Fight Leukemia
Yeah check on state labor laws. There is likely something there that helps you.

It isn't right that they charge overtime for you but don't pay you any more. That's definitely worth a RESPECTFUL complaint to management over. Why should they make time and a half when you are doing the work.

On the other hand, you can't look at what they charge for your services and complain that they make money off you. That's how business works.

No matter what if you signed a contract then you are stuck with what you signed so be respectful and see how far you get. Try approaching you manager with the attitude, "I see that you charge over time for my services, but I don't get paid overtime. I was wondering if there's been an error and you ment to pay me overtime."


Thanks for all your opinions. I had already mentioned it to my supervisor, coworkers and the CEO and they understand my position and I believe it has made them stop and think. There is no way they will pay me overtime. I've checked the labor laws and have spoken to the state labor board concerning my exempt status and as I've said, I'm ok with my exempt status.

My question was concerned specifically with the ethics of a non-profit charging clients overtime for exempt employees. I view it as taking advantage of a situation that was not meant to be used in such a way. There needs to be a direct connection between employee's extra effort on the job, clients being charged overtime, and the overtime profit used to reward those employees for that extra effort, which is what overtime is intended for. Overtime charges were never meant to be used as a way for only employers to add profit, rather, it was meant to give employees fair compensation for those times when they go above and beyond in their duties.

Unless there is some kind of correlating reward for employees related to those times, I'm going to take the stand that it is an unethical practice, however, they could change this by giving employees a bonus at the end of the year, the amount of which could pertain to the amount of overtime worked.

But I could be completely wrong, so that's why I'm asking!


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Fight Leukemia
It, while unfair, seems to fall into the catagorie of "things theatres do." I'm always mildy annoyed by the the fact that they not only charge more for me over a certain amount of hours but that they charge $8.75 an hour for me and pay me $2 less per hour.


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Premium Member
Departed Member
Pie4Weebl said:
It, while unfair, seems to fall into the catagorie of "things theatres do." I'm always mildy annoyed by the the fact that they not only charge more for me over a certain amount of hours but that they charge $8.75 an hour for me and pay me $2 less per hour.

That $2 an hour, at least here, would be used to pay your superannuation, workers compensation premiums, sick leave allocations, etc. It is a normal business practice as best I can tell. You can't tell me that the techs that we are required to use at the professional theatre we use are actually getting all of the A$38/hr.
The last company I worked for charged the client $35/hr for me to be there, with overtime as required. They payed me $9.30/hr for one year then a raise to $11.30 the next. They were making over $20/hr on my time. As well, the client was charged a minimum call of 4 hours, but the most I could clock in with on a short shift was a 2 hour minimum call. If I worked a 45min shift (which did happen a couple times) I got $22.60 while the company netted a profit of $117.40. Fair? I didn't think so but they were known for screwing around with people.


Active Member
It is not unusual for any company to charge a client labor rates at one rate while actually paying the workers a different rate. As noted by other posters, there are costs such as workers comp, unemployment, benefits, not to mention the company’s overhead and profit. (Okay, your example is “non-profit”, but their extra cash goes somewhere – development, salaries, etc.) [I think the non-profit part is an accounting issue; “non-profit” doesn’t mean “operate at a loss”.]

And it is usually best to keep things simple for billing: for example, charge all workers at the same rate (or maybe have a few, based on skill).

The ethics issue is how the company presents these costs to their clients – If they are actually stating in the contract with the clients that your rate includes an overtime rate, then that misrepresents the situation and I would say is unethical [see below]. On the other hand, the contract may be generic and there may be other individuals at the venue that do get (or did get) an overtime rate and your particular situation has just been overlooked; or no one has read the contract language closely lately. This also misrepresents the situation, but is merely sloppy.

At the very least, a client may not really care how much the venue’s employees are getting paid because the client is probably just looking at a bottom line cost (although they may care that they are getting an appropriate wage). But the perception of an overtime premium rate is intangible and I think that is where the ethics come into play here – a client may think “How nice that they pay their workers a premium overtime rate, what a nice company”. Or “I don’t feel so bad making the crew stay so late – after all they are getting well compensated for it”.

[The compensation arrangement between the employee and employer may be more a legal issue that an ethical issue. It is hours worked and appropriate compensation and that both employees and employer knows the rules going in. The compensation is largely dictated by the market but also by the employer wanting to retain good employees [money talks,…].



Active Member
So, I work for a consulting firm. In other words, the company pays me to go places and in turn they charge a certain amount of money per an hour for me to provide my expertise to the client. I do the IT version of going on tour in the live entertainment industry. The company makes money, they pay me a salary (which I assure you is not what they're collecting). If the company were to pay me what they collected, a) they wouldn't be able to pay all the non-billable resources (e.g. the secretaries, the HR department, etc) and b) they'd make no money --> I'd ultimately be out of a job when they went under.

Many firms make it policy (and IMHO a good policy) to not divulge to employees what they're charging per hour because it creates exactly the situation that's the root of this thread. Personally, I'd be lock and key on this information if I was running a theater employing young labor because small amounts of money are of much higher perceived value to the labor, IMHO.

I happen to know my employer gets for me because I do proposal work. With this in mind I concentrate on delivering value to the client equaling or exceeding the perceived value of my billable hourly rate because ultimately it's they who are paying my salary and providing the revenue to keep the company in business. It's in turn the responsibility of the company to make sure they're compensating me for providing value to the client and generating revenue. The company I work for awards bonuses at year's end based on whether or not you exceed a certain number of billable hours for the year.

In general, it's also the managers' responsibility to identify resources reporting to them who are in their opinions deserving of a raise commensurate with the employee's performance over the past review period. It's also the employee's responsibility to discuss with their manager their needs and feelings on their performance over the past review period.

If you go look at Big Blue (IBM) and the other blue-chip consulting firms (MCS, HPQ, Accenture, Xerox, etc), they're getting $250/hr and up as going rate for their consultants. Some companies will gladly pay this rate for the services of these firms, and they do a good job. Their consultants don't get paid on a different scale really than someone working for a smaller firm that's only getting perhaps $125 or $150 an hour for the exact same scope and quality of services. In other words, the firm can charge the client what they believe is the value of their services and more importantly their name on the services provided. The client choosing to hire this firm is the client's agreement of the perceived value associated with going with the specific firm they choose to engage.


An interesting argument, Brian.
You're pointing out that the "perceived value' may be much higher for one company's service while the perceived value for another company's service may be much lower, but the service provided may be exactly the same for both. And you illustrate that since the service is exactly the same, the difference in the fees is simply a matter of client perception, probably a result of the branding of the service provider.

So can we draw a parallel that one company's superior marketing may allow them to charge more and provide less than their competition, and that this is acceptable because price is determined by the perceived value of the consumer? If it is, I may have to agree.
Now. is my objection to the practice of charging OT for exempt employees a similar analogy? This is a question of morality. I think if you know your service is junk but you charge more because of your superior marketing, then you are not giving value to the customer because he would do better to use your competitor. There are legalities, and then there is doing the right thing. That's Ethics. My example involves the service provider "knowing" that the client assumption is that the OT fees are filtered back to the employee who worked the extra hours, and "knowing" that they really are not.
Being tight-lipped and letting them assume it, and not allowing the employee to know what the client is charged for their labor, adds up to taking advantage of a situation where you can make extra dough. They may profit, but it's an unethical practice.

Business should be conducted in an atmosphere where each party involved doesn't feel cheated, so in both examples presented here, I think some adjustment is in order to demonstrate integrity in business. If bonuses are awarded at year's end to these employees commensurate with those billed OT hours, then no problem, but I'm asking around and I'm finding out this is not often the case.


Active Member
This is an across the board phenomenon when dealing with large corporations. If you really want to raise your hackles... check in to what a CPA will bill a client for one of their flunkies crunching some numbers versus what they actually pay that person.

We need to also consider that the company has other expenses that they pay for an employee that aren't necessarily related to their salary. A couple of things that pop to mind...

1. Payroll tax
2. BWC Insurance (Bureau of Workers Compensation)
3. Insurance
4. Matching retirement funds where applicable

So when they pay a person $8.00 an hour and bill the clients $15.00 an hour for their services... a large portion of this is not company profit (even though it would be silly to think that there wasn't a bit of profit earning happening).


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Premium Member
Ah’ in also being a brian, one must consider what one companie’s training and SOP for what an employee will do will be in the end as compared to that of another company. I don’t know of many other lighting companies for instance that would spend five minutes for instance in re-surfacing a totally arched out P-28s Fresnel lamp base as opposed to replacing it. This or spend the time in improving in a design for a fixture as opposed to just doing a repair up to factory specs. but that's what clients come to see me for. What is it that you do (as employee and representive for it) for the client that is more worth them coming to your venu than that of the one down the street again? That's in a way what they are paying any wage for no matter what you get paid in otherwise being laid off in not employeed or not hired again next year. Your job - to make the client happy no matter what they are charged or what you get paid. As an absolute not what their contract says they are paying you - who signs your pay check, the client or the venu? Who than is that you represent in all ways including if any profit keeping it ethical in retaining that some stuff you don't speak of but make the client believe they get what they pay for.

Yes, name for oneself is in part a screwing of wasting money, but also something earned due to higher standards and trust built up. Your theater as opposed to renting from another, what do you offer in quality of production the other does not in making even charging for your over time worth it?

You while not always get what you pay for - do get what you pay for. Irrespective of money one in reality gets payed, in me also billing clients for my time also charge a rate for my services, the value of me spending time on something is worth it to a client. Is the after hours work you spend worth it to your clients also?

That service you provide is what you get paid for in your salary contract. I admit I get paid well in salary and even bonuses above what others will never see. Such salary and bonuses are to be kept secret of course to fellow employees just as my actual pay or even being salary in making money perhaps on a clent is also to be absolute different than what is charged. It’s less than what I might make hourly but compensating sufficiently to keep me as recognized by them to be of value and funded. For the contract, my overtime also means the shop lights stay on longer, the power to my radio stays on a little longer, the parts I use in doing things up to my level cost a little more and in general even if my premium bench time wage is not changed, it’s this time I’m working on this project as opposed to others is still costing the company money. Those other projects I'm not working on, on the other hand are costing the shop money given I'm not spending premium paid time on them and instead still doing them - just doing them when not funded.

Overtime is not just what you work in hours, it’s what you cost the company even if your time is static in accounting fees, rush fees, and operating and parts costs.

Is what time you have to work late also reflected in the bill for above and beyond the call that place you work has to operate in paying for it’s extra parts and hours of operation? Does the air conditioning or heat shut off after working hours? Do the makeup mirror lights turn off after normal working hours? Where otherwise does paying for this come form? Where does that next toy cool thing you want get paid for also from?

You in my view point are contract. What you set up in being paid for your labor given this contract has no reflection by way of ethics in what the customer is charged in you being by way of accounting to pay you to be there is charged. I highly doubt you are there without the stage lighting being on, yet is the customer charged for after hours usage of the lighting bill?

As only opinion, you have to get over the ethics of what you are paid verses what the customer is charged by way of what the bean counters charge. Two seperate issues in what you feel fair rate for your labor no matter the hours if salary, and that of what it costs the customer.

Certainly as any tech person do your best to do your job especially while on premium time even if not paid as such but in the end what the customer is willing to pay is just business. Just as when I play sales person I mostly do a 1.3% markup, at times I will lower it or in being fair to where I work will go up to a 100% markup based upon real costs or pain in my rear factor. It’s reality in doing business and in being a representive of the place I work. Nothing against such charges to the customer, just reality and necessity and 99.9% of all customers would understand business necessities.

I believe that you more need to understand that beyond your lack of pay the actual operating costs of being able to afford your wage in less feeling bad or wanting a greater percentage than you have at this point an understanding for. Sure it’s probable that you are getting screwed for wages - just as with your customers, it’s nothing personal, just business.

You run out of cable clips, where do more come from? Operating costs and budget? The light board goes down one final time, where does it's replacement come from? Often rental costs are kept market share and low ball. Those renters who less search for a quality place to do a production than for a place that's cheap won't allow such funding of the whole place really needed accounting wise sufficient to rent the place. They will be willing to pay for help to their lost production over time. Such overtime for you makes up for the actual operating costs. Such is your lot as not just tech person now screwed by contract you signed, you are also a business representitive both in giving your all yet also standing by what is needed to keep the place that you represent and needs all cash it can get to keep you employed. That extra money you did not represent in your contract means a new Nicopress tool next year or a few more Lekos. This especially if non-for profit. Money don't line anyone's pockets, it pays bills and gets you what you want.

Do your job, don't worry about what you negotiate in being hones. Instead welcome to the world of representing were you work and hoping instead this show earns enough money to keep you other than laid off next year or for some important improvement now funded that you need.

Now from what I see you are a tech person. You are waking up to reality but need to learn into the reality part of what’s going on at this point. Nope, you will never see what you are charged for. There is lots of business reasons for this even the more informed clients would understand.
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If I can summarize your post, you're saying that I shouldn't concern myself with how my company charges its clients, that the profit from my company's overtime charges goes to pay for my salary and benefits, the tools I use and the company's operating expenses.

I don't buy it. And I certainly don't agree with this statement:

>>>Sure it’s probable that you are getting screwed for wages - just as with your customers, it’s nothing personal, just business.<<<

Look, I understand that the company I work for needs to make a profit, and that some of that profit goes toward providing me with the tools that help me do my job. I know what it entails to run a production company since I operated my own company for several years. All operating costs get factored into legitimate prices. That's not the issue. The issue is, that I disagree with a doctor telling patients that they need surgery when they don't. I disagree with mechanics telling customers that their car needs a new transmission when it doesn't, or charging the customer for replacing a part that was never replaced. I disagree with salesmen selling products that don't do what they claim to do. You can go around selling snake oil and try to justify it by saying that you're simply trying to make a living, but that don't make it OK. It isn't "just business".
I'm not going to close my eyes to unethical business practices by the company I work for, otherwise, I'm just as guilty. I'm not trying to make a big deal out of this issue. I just want to point out to my company that to justify charging clients overtime for an exempt employee, that employee should receive a related bonus at some point.

It's simple. Charging an overtime fee is telling the customer that this employee requires extra pay for working long hours. If that employee is actually exempt from overtime pay, then you are lying to the customer about this and overcharging him. Businesses earn profit from charging legitimate fees for legitimate services.

Overcharging is unethical, as is lying and misleading the client. And billing for an expense that is non-existant is overcharging. I don't like getting ripped off, therefore, I don't condone ripping off others.


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Premium Member
Good points, the place charging for overtime hours should change and better state what they are charging for by way of fee. Such operating cost expences should also be built into the general fee.

My thoughts were in coming from somewhere else in a past job where they were low balling the cost of the rental and re-cooping where they could.

Well stated on your part still and point taken as true.


Active Member
I guess if I was the shop here I'd charge a blended rate for the labor. Blended rate basically means the rates you see for my resources aren't the rates I use internally to do my accounting for the job. It mitigates sticker shock sometimes, and abstracts the issue here of charging 1.5X for a resource after 8 hours and giving the resource standard rate.


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Fight Leukemia
a question ship, is that aimed at people working for production companies?

For theatres all those expenses should be re-couped in the additional fee to the added hours in the space, not on the staff.


Active Member
The answer is NO, there is nothing wrong from the transaction of a business.

Now what you need to do is look at the quality of the product you are providing vs. the quality of the toys vs. your hapiness being able to do what you are doing at that place vs. your total compensation. If there are no other venues, or the only venue in town, you might be stuck if you need to stay local.

Recently I have had to do the same thing with regard to the educational theater job I have. The product we produce is high quality, the toys and equipment are high quality, but I am unhappy with the professional growth and development and the money. But there are similiar venues where I live and I have checked out the compensation packages, and mine was lacking considering how much money the other production staff members are making.

So I looked to change venues.

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