Overtime in the Big 4

Grumpy Old Accountants follow Francine McKenna’s lead in questioning Big-4 practices of not paying staff accountants overtime.

The conundrum goes like this:  Staff accountants are “professionals,” and therefore should be paid salaries (fixed, without overtime) just like “professionals.”  Plaintiffs claim, however, that staff accountants are not professionals because they are not certified and they need to be closely supervised.  The work they do usually requires very little judgment (the hallmark of professional, per se).  Hence, they are not really professionals and should not be paid overtime.


Does it make a difference?  Grumpy Old Accountants point out that if Staff Accountants were paid overtime, then their base salaries would be lower.

What do you think?

Reminder – you can use whatever pseudonym you like, etc.


About Mark P. Holtzman

Chair of Accounting Department at Seton Hall University. PhD from The University of Texas at Austin. Worked at Deloitte's New York Office. BSBA from Hofstra University.


  1. As much as I enjoy overtime wages, I can only speak from my experiences so far in life that I hate overtime. When I worked for PCSS at Seton Hall, I was not able to work the overtime hours most of the time because I was taking classes at night. My coworkers however were available to work the extra hours. In my 35 hour work week, I would complete more assignments than my coworkers who worked and extra 3-4 hours per day. They gamed the system and knew that if they worked slowly enough, the backlogs would build and they would be offered overtime to "catch up". It is frustrating to watch a people around you slow down, and as much as I would like to think that accountants would be above that type of behavior, some people would likely take advantage. I believe if your options are to work quickly and go home or work slowly and be paid more money, some people will pick the latter. Every firm I spoke with was very upfront and honest (sometimes brutally) about the hours involved especially the big 4 firms. I chose accounting because I wanted to be a professional and coming out of working in IT for 10 years, it is much nice to be treated as a "professional" than as a "staff member". If you choose big 4, you are doing it for a specific reason and the long hours are your investment for whatever that reason is.

  2. I agree that if companies were required to pay overtime, then the base salaries would be lower. Also, the comment above illustrates what would happen perfectly. People inherently would rather work at a slower pace which comforts them and get paid more for it. The way to encourage extra work or more hours (I believe) should be in bonuses, i.e. after busy season.

  3. I understand the fear that, with overtime, staff might work at a slower pace to earn extra pay, but from my experience in a big accounting firm I don't think that would be the case. With approaching deadlines especially during busy season, staff work long hours as a team to get the project done. There is no time to really slow down their work pace. I feel that it would show that these firms do care about their staff, by offering them overtime at least during busy season. With mid and year end reviews, a required amount of billable hours, and a budget for those hours, I do not think that accountants would have the opportunity to slow down just to earn overtime. If they do receive overtime it is because they earned it. I currently know co-workers who work until 9pm to even 4 in the morning to make their current deadlines, and may not be up for a bonus as new staff. I feel they at least deserve the overtime.

  4. I think that even without a CPA license and with needing supervision, in my first year in public accounting there was plenty of opportunity to prove myself to be a "professional."In lieu of overtime, we have a higher starting rate. So although I worked several hundred hours more than some of the other first years, I was paid the same. While this is frustrating at the time, one assumes that using a combination of billable hours and realization of those hours will show who is working faster/slower. And *future* compensation will be adjusted accordingly.Unfortunately, after our first year, I can say that our raises and bonuses for us new folks did not reflect the vastly different hours we put in. Supposedly this will change a few years down the road, but if a firm feels it cannot reward a first year more for working more than another first year, then perhaps it should be paying overtime in the first couple of years.In general, I think that spfahey's scenario would be likely to happen with overtime pay though.

  5. The problem with imposing overtime pay is the same one with the minimum wage debate, it hurts the people that the mandate is supposed to be helping. If a Big 4 spends $50,000 per staff and hires 10 students, then the company projects to spend $500,000 on that project. If we increase the salary variable due to overtime pay, then each student would potentially get paid $75,000 instead of $50,000. Since the company will still intend on spending a maximum of $500,000 in salaries, the company will only be hiring 6 or 7 people. Simply put, 3 or 4 people will be out of a job.Therefore, I don't think the Big 4 should pay for overtime.

  6. I agree with Grumpy Old Accountants that if companies were forced to pay overtime, salaries would most likely decrease. I do not feel however that if overtime compensation were provided, productivity would decrease. I think that there is a lot of competition among these big four firms and offering to compensate accounting professionals for their extra hours would not cause them to slow down in order to milk the company. I believe that it would just be a benefit and potentially even become a motivating factor for those working late hours during busy season. With that being said, the decision to offer compensation for working overtime should be made by the company, and should by no means be imposed on them. As an accounting student, it was pretty much ingrained into me from the start to expect working extra hours – especially during busy season. Therefore, it should be expected and recognized as a means to progress within the firm. Instead of the extra hours worked being recognized through overtime pay, one will eventually be paid off for their extra work through promotions and bonuses.

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