This June, the Department of Labor proposed revisions to the Fair Labor Standards Act (FLSA), which oversees “minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.” Should the revisions take effect sometime in 2016, they may have serious consequences for nonprofit arts groups. One revision alone would raise the current minimum wage for overtime exempt employees from $23,660 to $50,440 a year.
Nonprofit arts organizations — but especially those in the performing arts — require their employees to work overtime. At Oklahoma City Ballet, for example, a staff requirement to work every show weekend is inherent in their job description. During Nutcracker season, these employees can go three weeks without a day off and on many days they work more than eight hours. We cannot give these employees time off during show weeks to make up for it because there is too much going on and we are already understaffed. On top of this, there are the many events, both of OCB but also of other organizations, that we attend to keep our faces active in the community. Again, this is something that staff members understand and agrees to before accepting their job. This is not unusual or different from any other performing arts organization. It is the model our industry is built upon.
Is this model right? That is a different question: no, it is not right. We should not have so many overworked and underpaid employees. This is also a situation that has plagued the nonprofit world for a long time and is one of the reasons nonprofits suffer more employee turnover than for-profit organizations. But this sweeping change in Department of Labor policy is not the answer. If we were forced, in one fiscal year, to take all of our employees under the minimum overtime-exempt salary and raise them to $50,440, it would be impossible for us to afford it. Simple as that. It is not a matter of whether or not we should increase wages. We cannot.
At the same time, government continues to decrease funding for the arts, making it even more difficult for us to increase compensation in order to be competitive. The message this sends is that government will make it harder to afford our payroll and give us less assistance to do so.
People who work at nonprofit arts organizations do so for one reason: they love it. They know they are going to have to work hard and they know they will deal with frustration and exhaustion. They care so much about their organizations that it is worth it to them. Many of them would not want a salary increase overnight if they knew it could potentially damage or destroy their company or force other employees onto the unemployment rolls. When you are passionate about what you do, compensation is not your main driver. If it were, almost no one would work in this industry.
There is a way to do this right: force incremental compensation increases over several years in order to bring overtime-exempt employees up to that new minimum salary. This would give the nonprofits the time that they need to adjust their budgets — that is, to increase revenues to meet these new standards. It is the fact that the Department of Labor wants to almost double those minimums overnight that is the problem. Of course I want to pay our people better: they more than deserve it. But the fiscal responsibility entrusted to us by our board, donors and patrons predicates the creation of sustainable business models. These proposed revisions would not enable us to act responsibly.