For some time, the working world has relied on the idea that an employee must “pay their dues” in order to move up in the company hierarchy. Nowadays, with the current threshold for overtime eligibility hovering at $23,660, this concept has escalated comfortably into “live in poverty for a while.”
In a directive announced on May 17, the latest in a string of executive actions aimed at alleviating some of the economic pressures on the middle class, President Obama moved to provide most salaried workers earning under $47,476 annually with time-and-a-half overtime benefits; moving forward, the salary threshold will be updated every three years to account for inflation. The Labor Department has estimated that the shift will mean over 4.2 million additional workers will become eligible for overtime.
From the Huffington Post:
Passed during the Great Depression, America’s overtime law was meant to protect workers from being worked too long and paid too little.
But under the current regulations, many working-class employees who earn above the low salary threshold are classified as “managers” and therefore don’t have overtime rights. Employers have an incentive to pile work onto these employees, since their extra time essentially comes for free. As a result, in retail some store managers will clock 60, 70 or even 80 hours, but only take home a modest salary in the $30,000 range.
The percentage of workers who are overtime-eligible has fallen dramatically in recent decades. In 1975, 62 percent of salaried workers had overtime rights; now, that share is a mere 7 percent, according to White House estimates.
Reporting on this looming shift in the “Devil Wears Prada economy,” the New York Times examines the effect this change might have on certain “prestige professions” such as publishing and the film industry, whose desirable-seeming (seeming!) jobs attract an endless legion of overqualified 20-somethings ready and willing to be underpaid and worked to the bone in the name of career development.
The Times spoke to several managers and company heads, many of whom appeared “disoriented” by the serious readjustments required by the prospect of paying employees a living wage:
In a letter to the Labor Department after it proposed the overtime rule last summer, Workman’s general manager, Jill Salayi, suggested that because the company could not afford to pay overtime to all newly eligible staff members or raise their salaries over the new threshold, it would have to cut back their hours in many cases.
“Less will be asked of them,” she argued, “which means they will not receive sufficient career development or see timely advancement and/or promotions.”
(Mr. Reynolds stressed that Workman was confident it would be able to adjust financially.)
The Times also reported, from a source at the company, that the 8-10 assistant literary agents at the Wylie Agency make in the $30,000-40,000 range and work 50-60 hours per week without overtime.
Andrew Wylie, who runs the agency, said he would consider paying time and a half if he asked junior staff members to work overtime, but not if they worked long hours of their own volition. “What am I supposed to do, sit at the door with a stopwatch?” he said. “I’m not going to do that.”
In this particular case, we have a few things going on—an employer who apparently won’t take responsibility for creating a work atmosphere in which employees might be peer-pressured into working overtime for no particular reason, and additionally, who doesn’t appear to trust his employees to log their own hours.
The National Retail Federation, in a statement critical of the move, suggested that salaried professionals in that industry could be “reclassified as hourly workers” deprived of benefits; as of yet, it’s unclear exactly how companies will account for these added costs. But as Judy Conti, federal advocacy coordinator for the National Employment Law Project, noted to the Washington Post, “The current level isn’t even enough to keep a family of four out of poverty”—and in creative industries, as the Times points out, low salaries and excessive workloads make for an economically homogenous workforce made up of those privileged enough to work for pennies.
The Times mostly spoke to the managers and CEOs of these companies (as well as The Devil Wears Prada author Lauren Weisberger, who hasn’t worked at Condé Nast in about 15 years). But we’d like to hear from you.
If you work in a creative industry—publishing, film, radio, etc.—and your job could be affected by these changes, how much do you make? Do you currently receive overtime pay? Benefits? What are your hours like? Do you like your job? How do you think this rule will affect it? Let us know, either at email@example.com, or my email below.
Image via MTV/The Hills.