Preparation
Lesson Narrative
Students evaluate compensation structures, differentiating between non-exempt hourly wages and exempt salaried positions. They will calculate effective hourly rates for salaried workers putting in massive overtime to understand the legal boundaries of corporate employment.
Learning Goals
• Differentiate between non-exempt (hourly) and exempt (salary) legal classifications.
• Calculate the effective hourly rate of a salaried position.
• Analyze the financial impact of unpaid overtime.
Student Facing Lesson Objective
• Let's figure out if earning a "salary" is actually a trap that forces you to work for free.
Student Facing Learning Targets ("I Can" Statements)
• I know the difference between hourly and salary pay.
• I can calculate my effective hourly rate.
• I can explain what legal overtime pay is.
Required Academic Standards
National Jump$tart Standards:
• Earning Income (Standard 1): Explore job and career options.
Glossary Entries
Hourly (Non-Exempt): An employee paid a set rate for every hour worked, legally entitled to overtime pay over 40 hours.
Salary (Exempt): An employee paid a fixed annual amount regardless of hours worked, legally exempt from overtime pay laws.
Effective Hourly Rate: The actual amount earned per hour when dividing a fixed salary by the total number of hours worked.
Overtime: Time worked in addition to normal working hours, typically paid at time-and-a-half (1.5x) for hourly workers.
Lesson
Warm Up
1.5.1: The Prestige Illusion
Launch: Project the "Would You Rather?" scenario. Have students raise their hands to vote, then call on one student from each side to defend their math.
Synthesis: Establish the baseline: Society treats "salaried" jobs as more prestigious, but legally, an exempt salary means the company owns your time without having to pay extra for it.
Student Facing Task
Would You Rather? Option A: Work exactly 40 hours a week guaranteed for $25/hr. Option B: Accept a "salaried" position for $52,000 a year, but you might have to work 60 hours some weeks without any extra pay. Which do you choose, and mathematically, why?
Activity 1
1.5.2: Effective Hourly Rate Math
Launch: Have students move to vertical whiteboards. Project the overtime scenario. Give groups 8 minutes to run the calculations.
Synthesis: Have the class observe the boards. (Teacher Key: Divide $80k by 52 weeks = $1,538/week. Divide by 70 hours = $21.97/hour. The manager is making less per hour than the hourly workers).
Student Facing Task
A restaurant manager accepts an "Exempt Salary" of $80,000 a year. They are thrilled. However, the restaurant is understaffed, and the manager is forced to work 70 hours every single week.
1. Calculate their weekly pay (assume 52 weeks).
2. Calculate their "Effective Hourly Rate" by dividing their weekly pay by their 70 hours.
3. Are they actually highly paid?
Activity 2
1.5.3: The Overtime Law
Launch: Present the legal classification scenario. Give whiteboard groups 8 minutes to analyze.
Synthesis: Facilitate a class debate. (Key: The Fair Labor Standards Act protects non-exempt workers. Employers cannot legally force an hourly worker to work off the clock).
Student Facing Task
A warehouse worker is paid $20 an hour (Non-Exempt). At 5:00 PM, their shift ends, but the boss asks them to stay an extra two hours to finish loading a truck, promising to buy them pizza instead of paying them.
1. Under federal labor law, what is the required overtime pay rate (time-and-a-half) for those two hours?
2. Why is the boss's pizza offer completely illegal?
Lesson Synthesis
Narrative: Bring the class back to their seats. Review the learning targets. Summarize: "A salary is not a status symbol; it is a fixed contract. If you accept a salaried position, you must aggressively protect your boundaries, or your effective hourly rate will plummet as the company demands more of your unpaid time."
Cool Down
1.5.4: The Promotion Trap
Narrative: This exit ticket serves as a formative assessment on effective wages.
Teacher Rubric: A successful response must calculate that if the promotion requires drastically more hours without a proportional increase in pay, the effective hourly rate drops, making it a bad mathematical deal.
Student Facing Task
You are an hourly worker making $30/hr working 40 hours a week. Your boss offers you a "promotion" to a salaried manager making $65,000 a year, but you will have to work 55 hours a week. Mathematically, why should you reject this promotion?

