Doing More with Less Staff Paying Play-by-Play Announcers

In the new era of staff reductions, doing more with less, and the potential of increased local programming should some amount of translator program origination be allowed, many a broadcaster is asking, how can I get a bit more from my staff and comply with legal requirements for overtime. Since the 2016 Department of Labor overtime order, broadcasters have been both focused and sometimes perplexed over how the overtime rules apply to some of their unique situations. One in particular concerns the regular employee who takes on the additional role of play-by-play announcer for local school sporting events.

In 1938, President Roosevelt signed the Fair Labor Standards Act of 1938 (“FSLA”), creating the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week. While the law is relatively easy to understand in the customary employee situation, many roles in broadcasting are anything but standard. Two particularly vexing questions are how to treat employees and others who do local play-by-play announcing for the station and salespeople paid by commission, we will treat salespeople in a separate memo.

Play-by-Play

While the COVID-19 pandemic has limited all spectator sporting events, including local ones, they will be back. Already announced, in fact, next season some professional sports by will play their games without spectators but with live media and some local schools may follow that model, which will make local broadcast play-by-play all the more important. Given the need to keep costs down and a trim staff, how can broadcasters pay their regular employees who make those broadcasts?

How is it done? As one broadcaster recently put it: stations use a variety of payment methods on play by play. “It's definitely not "one size fits all." Stations use a variety of payment methods on play by play.

Here’s a list of some ways play-by-play gets done:

1. Pay someone not connected with the stations on an independent contractor basis.
2. A current hourly employee does the games and if they work a total of more than 40 hours in that week they get overtime. This can mean revising work schedules.
3. Play-by-play is included in the employee’s regular job duties;
4. No overtime is ever paid because they are an exempt salaried employee.
5. A current employee, who loves sports, volunteers to do the games for free so he/she can get into the games for free!
6. Owner of the station does the games and doesn’t get paid anything!

So let’s look at these examples:

1. The Independent Contractor: This, of course, does not implicate paying someone not otherwise connected with the station as an independent contractor would not implicate the overtime rules, since they are not an employee and therefore not subject to the employee overtime rules. They are a contractor, performing a service for a negotiated price.

2. The “Fluctuating Work-Week” standard: An alternative approach that could work is known as the fluctuating workweek method. This method can be used for employees whose hours vary from week to week while there is a “clear and mutual” understanding that the employee will be paid a fixed salary as straight time compensation for whatever hours the employee is called upon to work in a workweek. If overtime hours are worked the employee is paid overtime compensation at a rate of one-half the regular rate for that week. The regular rate is determined by dividing the number of hours worked in the workweek into the amount of the salary. Because the employee's hours of work fluctuate from week to week, the regular rate must be determined separately each week based on the number of hours actually worked each week. On May 20 the DOL revised its regulation to make clear that employees who receive some form of incentive pay in addition to their fixed salary can be covered by the fluctuating workweek method. As a general rule, the additional bonuses or premium payments must be included in the calculation of the regular rate to determine how much overtime pay is due.

   So this method could work if the play-by-play employees regular position is one where hours are flexible, requiring less than 40 hours in some weeks, more in other weeks, but when all hours are counted, it averages out to 40 hours on a weekly basis. Essentially, the employee is paid a fixed salary that is understood to be compensation for a variable number of hours worked each week, whether few or many, as opposed to a specific number of hours. In weeks where it runs over, overtime is paid. That example would satisfy the fluctuating workweek standard. Note: this is a complicated and confusing concept. It should not be attempted without consulting legal counsel.

   In an attempt to make the test easier to use, the department listed 5 conditions that must exist:

   • The employee works hours that fluctuate from week to week.
   • The employee must receive a fixed salary that does not vary with the number of hours worked in the workweek. But, because the employee's hours of work fluctuate from week to week, the regular rate must be determined separately each week based on the number of hours actually worked each week.
   • The fixed salary satisfies the minimum wage.
   • A clear mutual understanding . . . that the fixed salary is compensation (apart from overtime premiums) for the hours worked each workweek, whatever their number, rather than for working 40 hours or some other fixed weekly work period.
   • Overtime is still computed under the Fluctuating Workweek Method: This one bears some explanation. While the regular pay rate will vary from week to week since it is determined by dividing the salary plus any non-excludable additional pay by the number of hours worked in the workweek” and time over 40 hours in the week must be paid at not at least another one-half the rate, since the overtime hours have already been compensated at the straight time rate by payment of the fixed salary and non-excludable additional pay.


3. Exempt Salaried Employee: “Executive”, “Administrative” and “Professional” (“EAP”) employees are exempt from overtime if they are paid at least $684 per week (equivalent to $35,568 per year), or as a “highly compensated employees (HCEs)” they are paid $107,432 per year; (employers may use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10% percent of the standard salary level. Each of these categories carries specific job description characteristics.


4. Small Market Radio and Television Station Exemption: Since 1961, the Fair Labor Standards Act has a special exemption for small market radio and television station employees. To qualify a station’s major studio located in a city or town that, as determined by the Census Bureau, has a population of:
   • 100,000 or less, provided that the city or town is not within a larger metropolitan area that has a population greater than 100,000; OR
   • 25,000 or less, even if within a larger metropolitan area provided
   • the smaller city or town is at least 40 miles (by air) from the principal city in the larger metropolitan area
   • The employee must be employed as an announcer, a news editor, or a chief engineer.

Conclusion

So, while it’s a little more complex than we would like, there are a number of ways to cover the play-by-play announcer salary and as radio renews its commitment to their communities, and if the FCC were to allow limited translator origination so that multiple local school athletics could be covered by one station, it will become more important for local stations to master the use of these arrangements; once we conquer COVID-19, of course.

This column is provided for general information purposes only and should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.

This column is provided for general information purposes only and should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.