New Federal Rule Could Affect Minimum Wage, Overtime for Reporters

By Kevin Goldberg

A small but major change could be coming with regard to the Fair Labor Standards Act (FLSA) as the Department of Labor finalizes a change to the rules dictating who is “exempt” and “nonexempt.”

kevin-goldbergThe change, which is almost certain to take effect this summer or early fall, may result in significantly more employees being eligible for minimum wage and overtime pay under the FLSA. There are particular implications for many reporters who may find that they switch from an “exempt” to a “nonexempt” status as the minimum salary threshold for exempt employees is likely to rise.

This could go so far as to force reporters and management to make some hard decisions about how those reporters are able to do their jobs when confined for the first time to a 40-hour work week that doesn’t seem to be a good fit for newsgathering and publication.

The changes, which are the first major changes in this area since 2004, were proposed by the DOL in a Notice of Proposed Rulemaking that was issued in July 2015. The DOL took comments on that proposed rule last summer and has now sent a Final Rule to the Office of Management and Budget (OMB) for final approval. The OMB has 90 days to review and approve this final rule for publication in the Federal Register (and can request another 30 days beyond that).  New rules generally become effective either 30 or 60 days after publication in the Federal Register. The DOL submitted the Final Rule to OMB around mid-March, so the new rules could become effective anywhere from mid-July to mid-September, depending on how quickly the OMB completes its review.

And what are the changes? Well, the biggest one involves the minimum salary threshold for an employee to be declared “exempt” from the FLSA’s minimum wage and overtime requirements.  An exempt employee is not entitled to overtime, no matter how many hours he or she works in a week. To consider an employee exempt, a qualifying employer must show the existence of three criteria with regard to that employee:  (1) that the employee’s job is administrative, executive or professional in nature, (2) that the employee is paid a predetermined or fixed salary, and (3) that the salary is above a certain minimum threshold.

It’s this third factor that DOL is changing in this proceeding. The current minimum threshold is $455 per week or $23,660 annually. The DOL is proposing to raise it to $970 per week, or $50,440 annually. The net effect of this change would be the reclassification of several currently “exempt” employees to “nonexempt”, meaning they would now be owed overtime pay if they work more than 40 hours per week.

As I wrote for my law firm’s “Commlawblog” this will  affect a wide swath of the workforce.  Employers – and employees – are advised to start planning now, even if the rules don’t go into effect for a few months.

Not every company will be affected – also discussed in that post are the criteria under which the FLSA applies – but certainly many will be. Those who may feel the biggest effect are journalists, many of whom are currently paid a salary falling between $23,600 and $50,440 and who are likely to be affected at a fundamental level in terms of how they can do their jobs effectively.

It’s hard to imagine, for instance, a reporter stopping work on a story with an impending deadline because he or she has already worked 40 hours that week – or cutting off a source mid-sentence because the threshold has been reached.  Again, planning ahead is going to be important (it’s also worth noting that the DOL sought comments on related issues, like the interplay between new technology like smartphones and remote access and the 40-hour workweek).

Kevin M. Goldberg, an attorney at Fletcher, Heald and Hildreth LLC, is chairman of the National Press Foundation.