When the Department of Labor’s new overtime rules go into effect on December 1, cultural institutions will need to cope with a new set of financial challenges.
To comply with the Fair Labor Standards Act, arts organizations with an annual revenue of $500,000 or more will need to pay their salaried employees more than $913 a week (or $47,476 per year). Otherwise salaried employees who work more than 40 hours a week and are paid less than $913 per week are eligible for overtime pay. The previous overtime threshold of $455 per week (or $23,660 per year) was established in 2004. The Department of Labor issued guidance for non-profit organizations, but much of the advice does not match the realities of working at a non-profit arts organization.
"It will pretty much affect everyone on staff," said Dana Schultes, executive producer of Stage West.
With seven full-time employees and an annual operating budget of $970,000, Schultes admits there is no room in the budget to add to salaries. Most employees, including Schultes, perform both administrative and artistic duties and work more than 40 hours a week on a regular basis.
Stage West will focus on rebalancing the hours spent in administration and production. During peak fundraising periods, Schultes may opt to take a break from acting and directing, sacrificing the dream work that drew her to the industry.
Schultes is concerned foundations may be maxed out in terms of fulfilling requests, but she would like to see the Fort Worth Arts Council offer help. "It would be nice to see additional funding from there," she said.
This overtime rule may be an opportunity to educate audiences about what their ticket price supports. "People don’t understand how much arts costs," explains Schultes. "When people balk at a $35 ticket, they don’t realize shows cost $40,000 to produce and it wasn’t easy."
Kathryn Smith, the general director of Madison Opera in Madison, WI, explains why the Department of Labor’s suggestion of spreading hours across several weeks is not possible. She sums it up neatly with the phrase "tech week." Tech week is an intense period of rehearsal time immediately preceding the opening performance of a show. It typically results in 70 to 80 hours of work per employee in one week. While actors, directors, and production staff work on stage, marketing and development staff members are hosting fundraising activities and publicity events in anticipation of the opening night. Tech week is scheduled according to the availability of the stage and cannot be moved or expanded. As Smith points out, "The long hours are simply a fact of life in the arts and have been for a century."
At the moment, cultural institutions are focused on the new rule’s implementation on December 1, but the future will bring more changes. The Department of Labor currently plans to automatically update the overtime salary threshold every three years. The first update will take effect on January 1, 2020 and the anticipated overtime salary threshold is expected to rise to $51,000.
Kimberly Richard is a North Texan with a passion for the arts. She’s worked with Theatre Three, Inc. and interned for the English National Opera and Royal Shakespeare Company. She graduated from Austin College and currently lives in Garland with her very pampered cocker spaniel, Tessa.