Public Relations Tactics

Pay Pals: New Federal Overtime Rules Mean Change for PR Pros

September 1, 2016

[vinnstock/getty images]
[vinnstock/getty images]

When the U.S. Department of Labor’s (DOL) new overtime rules go into effect on Dec. 1, 2016, PR firms across the country will be faced with a major change in how junior employees are required to be paid.

On that date, employees who make less than $47,476 a year will become eligible to receive overtime pay. The current minimum annual salary for white collar-exempt employees is only $23,660. The new law thus marks a major increase in the threshold at which white collar employees become exempt from overtime pay requirements under the Fair Labor Standards Act (FLSA), the federal law that governs how U.S. employers must pay most employees.

If PR firms do not raise employee salaries to meet the new minimum level of $47,476, then a significant portion of the junior-employee population will be reclassified as non-exempt under the FLSA, and thus become eligible for overtime pay.

Managers of this employee population — especially in professions such as public relations, where junior employees are often expected to work long hours and be easily reachable by email and cellphones during off-hours — will need to adjust to the new rules. Companies may need to consider changing how they classify and pay some of these junior employees.

Transforming a culture

In the PR profession, several categories of junior employees will likely be affected by this new rule. According to a March 2016 PRWeek survey, median annual salaries nationwide are $37,500 for account coordinators and $40,750 for assistant account executives. Even many account executives (AEs) also have annual salaries nationwide that fall below the new minimum.

PR firms may not be currently tracking hours for these categories of employees because, historically, they have treated these employees as exempt from overtime requirements. Exempt employees receive the same pay regardless of how many hours they work in a week. Because of this, PR firms may have not focused closely on the total weekly number of hours worked among these employee populations.

In addition, under the new law, there will be automatic increases to this $47,476 minimum every three years. Employers will need to carefully assess how to change employee compensation, duties and working hours to manage the accompanying change in overtime costs.

The risk can be great for employers who don’t comply with the new DOL rules. Under federal law, employees can bring class action lawsuits for failure to pay overtime, including “off-the-clock” work. Employees who win such lawsuits can recover not only lost wages but also punitive damages and attorneys’ fees.

Preparing managers now

One key to managing overtime obligations going forward is for employers to prepare their managers now for this significant pending cultural and practical shift.

Managers will need to be more vigilant about how and when they assign work, and what time of day they expect it to be completed. Clear policies should be established regarding how and when managers communicate with non-exempt employees. Managers need to understand the potential financial consequences of asking employees to perform work outside of the regular business day. Managers may also wish to limit after-hours communications with non-exempt employees so that junior-level employees are not encouraged to work “off the clock” without express approval.

Of course, in many situations, this may be at odds with the realistic demands of a fast-paced, client-centric profession such as public relations. PR firms therefore need to decide now how they will continue to timely meet client needs come Dec. 1. Some firms may choose to hire additional non-exempt staff to work the excess hours. And other companies may choose to pay overtime to existing non-exempt staff, or assign more work to exempt employees, while remaining mindful that both the bulk of their work still involves the performance of exempt functions, and that the excess work does not result in a morale issue for those employees.

PR firms with offices across the country will also need to take into account that variations in pay based on geography could result in different classifications for the same titles. For example, an AE who works in Washington, D.C. may make $40,000 — subjecting him to the new overtime rules — while an AE in New York may make $60,000 and remain exempt from the rules, provided, of course, that she is performing exempt functions.

How will PR companies handle such variations? How will they communicate to employees about new policies and any changes to their duties or pay? These are questions that savvy firms must tackle with experienced legal counsel sooner rather than later. Waiting to address such important changes will make the transition under the new federal rules more difficult and increase exposure to the risk of litigation.


Michael C. Lasky is a senior partner at the New York City law firm of Davis & Gilbert LLP. He is founder and chair of the firm’s Public Relations Law Practice Group, the only law firm practice group in the country devoted to meeting the legal needs of public relations and marketing communications firms. Lasky is a regular speaker at the annual Counselors Academy conference and works with several Counselors Academy members.

Jessica Golden Cortes is a partner in the Labor & Employment Practice Group at Davis & Gilbert LLP. She counsels and litigates on behalf of employers regarding discrimination, retaliation, hiring and terminations, restrictive covenants, employment policies, social media, wage and hour and federal and state family and medical leave laws.

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