NNA addresses questions about revisions to overtime rules

The National Newspaper Association' Tonda F. Rush addressed the U.S. Department of Labor recent announcement regarding a major revision to the overtime rules in the Fair Labor Standards Act in two articles: Newspapers alarmed about overtime revisions gives an overview of the proposed changes and Can an employee volunteer to work without pay? answers a common question. The full texts of both articles are included below.

Newspapers alarmed about overtime revisions

August 1, 2015

By Tonda F. Rush CEO and General Counsel | NNA WASHINGTON—Newsrooms already struggling to cover their communities with smaller staffs and increasing demands reacted with alarm in July when the U.S. Department of Labor announced a sweeping revision to the overtime rules in the Fair Labor Standards Act. DOL said it wanted to increase the minimum salary levels for professional, creative, executive and administrative employees from $23,660 per year to $50,440 per year, all in one huge jump. It estimates 4 million employees in the country will be reclassified and become newly eligible for overtime pay. There are no regional adjustments based on cost of living in either the current or proposed threshold salaries. Under existing rules, in order to be considered a salaried, exempt employee, a worker needs to earn at least $23,600 per year, be paid in one lump sum no matter no matter how many (or few) hours worked in a week, and perform the duties under one of the several categories of exempt employees. DOL says it is not currently considering changing the “duties” part of the requirement, though it is open to suggestions on that as well. But it believes the minimum threshold, which has not been adjusted since 1975, should be increased all at once to make up for the lost years without increases. It also proposes to annually raise the minimum salary threshold by some objective inflation test, although that is not decided yet, either. It is receiving public comments through Sept. 4. The issue of community newspapers and overtime rules has been much litigated over the years, particularly on the application to journalists. Former dean of journalism at the University of California at Berkeley, Ben Bagdikian, testified in a lawsuit against the Concord Monitor in the early ‘90s that journalists were not professionals. No degree is required as a condition of their jobs, they do not draw upon an academic body of knowledge, and they do not engage in creativity. Instead, he said, they are required to observe and write. On the strength of his testimony and DOL argument, the U.S. Court of Appeals for the First Circuit ruled journalists out of the professional realm. The DOL rules soon followed suit. Most newspaper reporters, and even many editors, are not salaried now and are eligible for overtime. But for those who may be exempt as administrators because they supervise staff, or under other rules, salaries are permitted. That rule also applies to outside salespeople and some others. All of that may change after September. National Newspaper Association members responded to a survey on their attitudes toward the rules change. Among the findings: • More than 60 percent said they already struggle to keep their newsroom staffs within a 40-hour workweek. • Nearly 15 percent said the challenge was primarily in the sports department. • 55% said they pay overtime when required, although more said they either don’t permit overtime hours, or let employees take time off within the pay period to even out their time. • Only 17 percent said they would be able to pay the overtime under new rules. • 30% said they would have to eliminate jobs, and 41 percent said they would hire more part-time staff. • 70% said it would affect employment in their communities by driving employers to eliminate jobs. • 11% said they would not be affected. Some added comments that the industry would simply have to adjust. NNA members with comments on the proposed rules are encouraged to respond to the member survey at www.surveymonkey.com/r/6D27BRL. National Newspaper Association President John Edgecombe Jr., publisher of The Signal in Geneva, NE, said the NNA board of directors had requested the survey so it could consider how deeply the industry might be affected. “NNA publishers want to be responsible members of their communities. We are sensitive to the fact that our staffs also have private lives. I think our generation has managed differently than perhaps our parents and grandparents may have, when people pretty much lived in the newsroom, to make sure our staffs’ lives are not consumed by their jobs. At the same time, we are in a news-breaking, deadline-driven business, where creativity and curiosity have to drive our news coverage. News doesn’t happen on a 40-hour workweek, and most reporters don’t want to be caged by the rules so they cannot cover stories. Budgets are tight because revenues are tight, and this is probably our new normal. “We want to do the right thing, but we recognize that great leaps in salary requirements like the Labor Department proposes would simply handcuff us when we are trying to cover our communities,” he said. Edgecombe said his board would develop a policy in response to members’ comments and respond to DOL’s request for information.

Can an employee volunteer to work without pay?

By Tonda F. Rush CEO & General Counsel | NNA Q One of our reporters has a hard time staying within a 40-hour work week. Frankly, he wants to get the story, regardless of how much time he puts in. But our budget does not allow for overtime. So, can he volunteer his time, and if not, I hear we can have a “Belo” exception that helps us stay on budget. A The proposal by the U.S. Department of Labor to radically change the way workers are classified as exempt or non-exempt under the Fair Labor Standards Act has caused a lot of newspaper management people to look at their current practices. It is a complex topic, and probably about to be made more so if the rules change. But let’s look at today’s rules. And also, be mindful that many states have their own rules that are even stricter for employers, so it is important to check both federal and state rules from time to time. If an employee is not exempt from the Fair Labor Standards Act that requires payment of overtime for a workweek that exceeds 40 hours, the employer owes the worker time-and-a-half in compensation for every extra hour worked. There are many misunderstandings about this rule, and indeed, responses to the National Newspaper Association’s recent member survey on the wage rules confirm that there is confusion. Here are some tips: 1. Paying someone a fixed sum as a salary is not enough to qualify the person as exempt. Conversely, paying an hourly rate is not necessarily required for non-exempt—it is just the easiest to administer. Any system that gets to a 150 percent pay rate for weekly hours over 40 is OK under federal rules. 2. To be exempt, the worker has to earn more than $23,660 a year and fit under one of several categories of duties for administrative, creative, professional or other categories. Although there are many newspaper employees who may be exempt, most reporters at community newspapers are not. The industry used to consider them professional employees, but in various federal court rulings, DOL has been allowed to classify them as non-exempt, and therefore not professionals under the rules. 3. A worker may not “volunteer” time after 40 hours. If work is done, it must be compensated. 4. An employer may arrange in advance for a set number of overtime hours to be worked and pay a flat salary under an exception from a 1942 Supreme Court case involving the Belo Corp. An agreement between employer and employee would involve setting a base rate in excess of minimum wage to cover the 40 hours and then adding in a set number of overtime hours at 150 percent of that base rate. But the Belo exception is allowed only for jobs where irregular hours are essential and cannot be controlled by the employer. Only if many workweeks go fewer than 40 hours, as well as more than 40 hours, can the employer use the Belo exception. 5. There is an exception for outside salespeople. But personnel who spend most of the day in the office on the phone and only venture out from time to time are not eligible for it. The FLSA rules trip up a lot of small business employers. If the DOL proposal goes into effect, there will be even more traps laid for the unwary, because the annual earnings to qualify for exempt will more than double to about $50,000. trush@americanpressworks.com