Here's How the New Overtime Law Could Affect Your Shitty Creative Job
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Recently, in response to Obama’s recently announced executive action on overtime, we asked readers working in creative industries affected to write in and tell us a little bit about how they stand to benefit (or not). We got a lot of submissions.
The new overtime directive, effective December 1, 2016, will raise the threshold for overtime pay eligibility from $23,660 a year up to $47,476 a year, making an estimated 4.2 million additional workers eligible for overtime. The change is characterized by the Department of Labor as a long-overdue modernization, since the current threshold, updated only once since the ‘70s (in 2004) and diluted by inflation, “has left millions without overtime protections to which they should be entitled,” according to the Department of Labor.
This directive is only meant to directly affect salaried workers, since hourly workers are supposed to earn overtime already; it will allow full-time salaried workers making under $47,476 to receive overtime benefits if they exceed 40 hours per week. According to the Obama administration, employers have a few options for how to account for the change: reduce workers’ hours to 40 per week, pay time-and-a-half for overtime hours worked, or raise workers’ salaries above the new threshold. Once above this salary threshold, employees are subject to various professional, administrative, and executive exemptions, rendering overtime benefits possible but less likely.
Republican legislators, unsurprisingly, have claimed that this will kill jobs and destroy the economy, but others have taken issue with the rule, as well. The New York Times recently chronicled a bit of an upset in the creaking, inflexible world of “prestige” creative professions like publishing and film—publishing house Workman’s general manager Jill Salayi claimed that reducing workers’ hours would lead to less “timely advancement and/or promotions,” while, in a somewhat dense interpretation of the new law, Andrew Wiley of the Wiley Literary Agency refused to “sit at the door with a stopwatch” and keep tabs on his employees.
While the overtime directive will affect a wide variety of industries (although, as mentioned, certain employees in certain industries are subject to exemptions from minimum wage and overtime pay under the Fair Labor Standards Act, and doctors, lawyers, and teachers will not be affected by the new overtime rule at all), its influence on so-called creative industries will be particularly interesting, as these are often jobs whose desirability and prestige juxtaposes sharply against dismal starting salaries and long hours, which can—especially in industries such as, say, fashion, or journalism—lead to a startlingly non-diverse workplace comprised of individuals who can afford to work for very little.
(It bears noting that one of several exemptions involves “creative professionals.” In order to qualify for this exemption, a worker must be paid at the new salary threshold of $47,476, and their duties must involve “invention, imagination, originality or talent in a recognized field of artistic or creative endeavor,” according to the Department of Labor. Not all work in creative fields involves such “invention” or “imagination,” and regardless, as you’ll see in the responses below, this new salary threshold should have a significant effect on many workers in creative fields.)
The responses to our query ranged wildly. Many had reservations: some were concerned about an added strain on small businesses, a working parent worried about being switched to hourly pay and losing her job flexibility, and several believed that companies would simply try to sneak around the law.
Indeed, employers can (and some likely will) recalibrate pay rates to account for the new law in order to avoid spending more money, reducing an employee’s hourly pay to account for their new overtime earnings. Judy Conti, federal advocacy coordinator for the National Employment Law Project, told me in a phone interview that she believes using this tactic would “backfire” on employers, as workers would likely pack their bags (although one can imagine circumstances under which that might be difficult).
As for the question of small businesses, “the fact of the matter is if the only way a business can succeed is by working someone at 60 hours a week for $25,000 a year, if the profit margin is that small, then that business has really big problems in and of itself,” she said. “That’s not the model we need to embrace as a country.”
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