The National Newspaper Association this week objected to a proposed 50% increase in exempt employee salaries under the Fair Labor Standards Act (FLSA) and recommended instead a phased-in schedule for small businesses.
In March, the U.S. Department of Labor proposed increasing the threshold salary for employees exempt from overtime pay under the FLSA to $35,300 annually, up from the existing threshold of $23,660.
The proposal was welcomed by many in the business world, as it revised an Obama administration rule that would have increased the threshold by more than 100%. But NNA finds that even the more modest increase would do harm to many community newspapers in small towns, which have faced a host of new business challenges in the past few years. Rather, NNA advises, the increase should be phased in over five or six years so employers can absorb the impact.
For small community newspapers, the proposal constructs a new barrier to maintaining news coverage in small communities. In this industry, the stresses burdening survival and continued community service have been coming at an alarming clip: internet competition, shrinkage of small towns, tight economies among small business advertisers and, in 2018, a temporary but devastating tariff on newsprint supplies that continues to distort the paper supply chain for small newspapers. All of these issues are threatening the futures of communities that depend upon local news from the local newspaper. So they also threaten the local community. Confronting a 50% payroll increase for exempt workers adds to an already daunting pile of challenges.
NNA’s formal comments were accompanied by a letter signed by more than 200 newspapers around the country, noting the difficulties they face in achieving higher professional salaries.
NNA President Andrew Johnson, publisher of the Dodge County (Wisconsin) Pionier, said the Labor Department proposal was well-meaning, but ill-designed for small businesses.
“America’s small towns, particularly rural areas affected by crop disasters and disrupted markets, are not growing very fast. Many are getting smaller, as the economies become ever more challenging. Though most employers in small businesses work toward fair compensation, expecting them to absorb a 50% increase in a single year just pulls the rug right out from under them. In our industry, we are still reeling from a 30-50% increase in printing costs caused by the tariffs on Canadian newsprint last year. We need policymakers in Washington to understand that regulating us the same way they regulate Amazon or Walmart just isn’t fair,” Johnson said.
In order to be an exempt employee who is not eligible for overtime, a worker must be paid a set amount each week that is above the threshold set by the Labor Department and must be doing work that corresponds with the executive, administrative or professional categories described in regulations.