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Howard Sherman: New US pay laws are a chance for the theatre industry to better itself

US president Barack Obama. Photo: Shutterstock US president Barack Obama. Photo: Shutterstock
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By confessing up front that this week’s column concerns an adjustment in the government overtime provisions of US labour law, I risk you turning away almost immediately. But stay with me, because theatre organisations throughout the country will be affected –and soon.

Back in May, President Obama lifted the level below which overtime work must be paid at a rate of one and a half times regular hourly wage. It’s not a small jump: previously overtime was only required for workers making up to $23,660 per annum. As of December, that more than doubles to $47,476, regardless of whether they’re actually punching a time clock or not. The number of ‘exempt’ employees just got smaller.

For the arts in general, as well as such ‘glamour’ industries as publishing, there has long been a tendency to hire young people at low wages and work them hard and long, to see if they have what it takes to stand up to the rigours of industries that are perceived as high-demand. The thought was that there was always someone, you should pardon the expression, in the wings, ready to jump into any opening that may come available. But with the threshold for overtime pay raised, now more than just entry-level work in the arts will cost employers more, with a real impact on the bottom line, whether in additional compensation or the hiring of more employees to avoid shouldering overtime costs for the existing staff.

With many subsidised companies in the US running on July-to-June fiscal years, the May announcement came late in the budget cycle. Implementation in December means seven months of immediate budget impact in the fiscal year currently underway. Arts organisations are still in the process of assessing how best to handle this, because sudden rises in ticket prices may be counterproductive and funders aren’t about to instantly write bigger cheques. For the staffer already at $40,000 a year, a disproportionate annual one-off raise may stave off the 40-hour dividing line, but what of the $30,000 employee who regularly works 55 hours per week?

To be sure, some organisations are going to try to figure out new angles to keep costs down. Surprisingly, an article in American Theatre magazine last month suggested some solutions that didn’t seem to have the best interests of workers in mind. Included were “Pay folks the same-ish” (reducing hourly rate so that with overtime net compensation would remain the same) and “Cut benefits” (taking money applied towards health insurance – no NHS for us – and applying it towards increased compensation costs).

Those options didn’t go down so well with commenters directly on the article and on social media, and I certainly hope that few, if any, theatres plan to take this advice. Having come of age at a time when theatres didn’t have employee handbooks that spelled out in detail even such basic policies as maternity or bereavement leave, I’ve watched as the theatre community – in general younger than our symphony, opera and ballet companies – has matured as employers. That said, there’s still a tendency to rely on a steady supply of early career employees to fill relatively low-paying positions, compared with equivalent roles in the commercial sector.

The new regulations are hardly unique to theatre or the arts, as they apply to all US employers, though its certainly smaller businesses that are going to have the toughest time absorbing the new costs – and what are most arts organisations but small businesses compared to major corporations? But, hopefully, the net result will be a further maturation of the field in terms of compensation for all employees, and the ability to sustain careers in the arts. And perhaps it will make the arts more competitive with other fields in the earliest years of young people’s work lives, and retain people who might otherwise forgo the arts, so they can take jobs not solely for money, but for love as well.

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