The U.S. Department of Labor may finalize an overtime rule change in May that could dramatically impact newspaper operations.
It would more than double the salary test used to determine if an employee is eligible for overtime pay.
The current federal threshold is $23,660. If an employee makes less than that amount, the employer must pay overtime for work over 40 hours in a week.
The proposal raises that threshold to $50,440 – a jump of 113 percent.
“Let me be clear, the current salaries test, which hasn’t changed since 2004, should be increased,” says David Chavern, president and chief executive officer of the Newspaper Association of America. “But addressing a decade of inaction with an immediate 113 percent increase will result in unintended consequences that will ultimately hurt current employees.”
Newspaper Association of America and National Newspaper Association representatives were scheduled to meet with Department of Labor officials to urge an adjustment to the proposal.
A Newspaper Association of America survey indicated most newspapers would either have to replace full-time employees with part-time or convert exempt employees to hourly wages. This complicates scheduling – particularly for a newsroom where breaking stories aren’t limited to an 8-to-5 schedule.
The National Retail Federation reports the rule change would have an impact of $745 million on more than 2 million employees.
This would affect the amount of advertising dollars available for those businesses, which would impact newspapers.
The Newspaper Association of America also points out that the change doesn’t take into account regional differences in the cost of living.
It says the proposed salary threshold is nearly $10,000 higher than California’s overtime law and nearly $15,000 higher than New York’s.
Indiana uses the federal threshold, so the proposal would increase that threshold by $26,780.
In the past, the salary test threshold was set by the Department of Labor at between the 10th and 20th percentile of all current full-time exempt employees.
The Newspaper Association of America says the current proposal would set the threshold at the 40th percentile.
HSPA shared Newspaper Association of America talking points with Indiana publishers for consideration in writing editorials on the subject.