Federal Overtime Regulations and the Ad Industry

Introduction:

On May 17, 2016 the U.S. Department of Labor announced changes to overtime compensation for full-time/salaried workers across the U.S. This impacts advertising agencies due both to their unique workforce composition as well as the salary levels affected by the changes.

What It Means:

The new rule, “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees,” increases the current salary level subject to overtime (OT) pay from the previous threshold of $23,660 per year to a new threshold of $47,760.00 per year. Full-time/exempt employees within these classes and pay ranges will become newly eligible for OT pay.

The new regulation will put an enormous compliance burden on ad agencies within a narrow period of time (less than a year) as HR managers scramble to convert employees to hourly tracking schedules.

What the 4A’s Is Doing:

4A’s has worked proactively, from the moment the draft rule was proposed in 2015, to improve key provisions that would have otherwise adverse affects—on both agencies and their employees.

Is It Working?

Thanks to these efforts—and continued lobbying (below)—the final OT pay rule is more manageable for agencies to implement in a number of respects:

We’re Continuing to Work for You

Despite these improvements, the 4A’s Washington team continues to lobby members of Congress who oversee labor department funding and policy. These include members of the House Appropriations Committee, the House Education and Workforce Committee, the Senate Committee for Health Education Labor and Pensions and the various sub-committees.

More Information:

Read more about 4A’s advocacy on the new Federal OT Pay Rule:

“Expect Disruption With New Overtime Rules” (MediaLife, May 24, 2016)

“How The 4A’s Is Tackling the Overtime Pay Issue in Washington” (Campaign US, March 31, 2016)

“The Big Payback—Agencies Brace for Obama’s New Overtime Rules” (Campaign US, March 28, 2016)

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