Since the Department of Labor announced back in May the updated overtime regulations in the Fair Labor Standards Act that take effect on December 1st, nearly every American industry has examined how – and how long - its employees work. Perhaps this is the pendulum swinging back after decades of increased expectations of work hours, but all fields must now consider whether they have built their companies on the backs of employees who do not set their own schedules. The performing arts are no different.
I urge you to read the revisions yourself: the Department of Labor has assembled a number of fact sheets and guidance documents. The number most reported from the revised regulations is that the salary threshold at which point most ‘white collar’ employees are considered exempt from earning overtime – in other words, when people earn enough of a regular salary that they do not need to be paid overtime – has been raised to $47,476 for an annual salary or $913 per week. This salary applies to both commercial and non-profit businesses.
Now, before everyone begins the Happy SM Payday Dance, this rule only applies to businesses that bring in more than $500,000 in annual revenue, and that amount only applies to earned income (ticket sales, concessions, etc.) and not contributed income (donations and grants). So if your company is operating on a small-to-midsized budget, time-and-a-half may not be in your immediate future. Diep Tran wrote a very informative piece in American Theatre that explains the rules and the exceptions – for instance, even a small business may need to pay overtime if your work requires you to engage in interstate commerce, i.e., touring.
Note: While very thorough, many artists took issue with producer-perspective of the original article, so Diep Tran followed it with another article on the advances, and possible set-backs, in the work/life balance of many artists. Will this change lead to more part-time positions rather than risk paying overtime to full-time employees? Would part-time assistants who are present for overtime situations even help stage managers? Perhaps. But I suspect that it would only add to our stressload. After all, they would not be assisting us - they would be subbing for us so we are not present during overtime.
Another wrinkle is that these revised understandings of the Fair Labor Standards Act (FLSA) do not apply to independent contractors. So if you are the resident SM with a W-2, you can be eligible for overtime. If you are hired by the show with a 1099, well… that is what I want to discuss.
My argument: stage managers are employees and not independent contractors.
Actors Equity Association states in even the tiny Guest Artist Agreement that actors and stage managers are not independent contractors and therefore normally receive W-2 tax documents, but that is not always the case for non-union stage managers. This past summer, Martin Konrad wrote a piece for Entrepreneur about the blurred distinctions between employee and independent contractor.
He quotes a 2015 Department of Labor Administrator’s Briefing that the FLSA defines employ as to include “suffer or permit to work” with an “economic realities” test, which examines whether the worker is economically dependent on the employer or is self-employed. If you are an artist who performs at multiple venues with the same act that you developed yourself in your own space, then are you are in business for yourself. But if your show is developed for a specific producer and your compensation is from that one primary source, then that producer is your employer.
In addition, Independent Contractors are expected to have control over setting their own work schedules and work locations, while bearing the responsibility of providing their own tools to complete a project. That sure doesn’t sound like most stage managers.
This is too big an issue for a single blog post and our legal system makes me wary of offering interpretations of government policies. Do other stage managers have information about these new overtime rules?
David J. McGraw is not a financial manager but an artist who is very concerned about both the work/life balance for fellow artists and the viability of our arts organizations.