New Overtime Rule May Backfire into Less News and Fewer Jobs, NNA Says

From NNA

A new rule governing overtime pay for employees will create disruption at small newspapers and likely lead to more job cutbacks, National Newspaper Association President Chip Hutcheson, publisher of The Times-Leader in Princeton, KY, said today. He expressed disappointment that the U.S. Department of Labor had rejected calls by many small businesses to introduce a more modified and gradually-rising threshold that sets overtime-eligible employees apart from professional staff.

The new rule, which will go into effect Dec. 1, sets the threshold for overtime eligibility at $913 a week or $47,476 a year. The Labor Department reduced the threshold slightly from its original proposed rule last summer, which was proposed at $50,440. Employees earning an annual wage under the threshold will be required to report their time on a weekly basis and employers will be required to pay time-and-a-half for hours over 40 each week. The final rule did not change the so-called “duties test,” which spells out what sort of work employees must do to qualify as overtime-exempt.

NNA represents 2,400 members across America, primarily small-town and family-owned newspapers. Many are already under financial pressure from weak local economies and they can’t afford to pay additional overtime. For them, the unintended consequences include lost jobs and less news coverage. For the editors and sales managers and other professionals who will be forced to begin punching a clock, the new threshold will result in less flexibility in terms of when and where they work and how they perform their jobs, and less opportunity to advance their careers. Hutcheson said he regretted that the Labor Department was forcing community newspapers and their small-town employees and customers into a bind, where employee hours will be restricted by budgetary necessity. The impact upon news coverage will be felt immediately, he said. “NNA agreed that it was past time to adjust the salary levels,” he said. “The Labor Department failed to do its job for a decade by creating more graduated adjustments that small businesses could live with. Then it decided to try to force the small business economy to leap the whole chasm in a single bound. Its ruling fails to recognize the realities of a slow-growing business climate. It also ignores the big differences between costs of living and earnings potential in small towns and major cities. We asked the department to create a regional scale, and obviously our concerns have fallen on deaf ears.”

NNA provided comments to the Labor Department’s proposal, pointing out that newsrooms have difficulty managing a 40-hour week, and that legal barriers for private sector enterprises to offer meaningful flex time meant that news and sports staff could not take advantage of time off during slow seasons to compensate for extra hours spent on breaking news and sporting events. NNA requested consideration of a regional scale and joined the Newspaper Association of America in suggesting that thresholds should be set at a level of twice the annual earnings of a minimum wage earner. The minimum wage index would have given states and cities the ability to effectively set the overtime-eligibility standard.

Now, Hutcheson said, NNA will consider the industry’s options as it completes analysis of the new rule. It has expressed support for HR 4773, which would require the agency to carry out a more effective analysis of the effect of its rule upon small businesses, nonprofits and public employers. “In the end,” he said, “we agreed with the Labor Department’s goal of improving the income of workers. We disagreed mightily with the manner in which it is pursuing the goal, and we believe in the end it will hurt our workforce, our newspapers and newspaper readers.”