New Federal Rules Will Redefine Overtime Pay for Architects
Looming changes to federal overtime rules could have a lasting impact on the architectural industry, particularly among firms that expect junior employees to work long hours for low salaries.
Beginning December 1, salaried workers who earn up to $47,476 a year must be paid time-and-a-half if they work more than 40 hours during the week. The previous cutoff was $23,660 a year. The new rule applies to companies of all sizes, affecting most employees, including those working in creative fields like architecture.
The changes could rattle industries that have long used a federal exemption for so-called “creative professionals” to avoid paying some workers overtime. The Labor Department currently gives businesses wide latitude in deciding who meets the criteria. But under the new rules, no one making less than $47,476 a year could be considered a creative professional exempt from overtime.
Critics worry that the changes could unfairly burden businesses, particularly smaller ones with less financial flexibility. But supporters insist that overhauling outdated labor rules will improve working conditions and ultimately encourage firms to think more carefully about how they run their businesses.
“Architecture is but one of many industries that for decades has gotten a free ride because of the weakness of the regulations,” says Judy Conti, the federal advocacy coordinator at the National Employment Law Project. “This new regulation is going to set a salary guideline that is much more in line with a professional salary.”
In 2015, the median annual salary for a first-year intern architect was $42,000, and $46,000 for a second-year intern, according to a survey by the American Institute of Architects. To comply with the law, employers will have to give employees raises, start paying overtime, or scale back hours. “People are going to get either more money or more hours of their lives back,” says Conti. “Both of those are good things.”
In 2013, Alexandre Hamlyn earned $2,000 a month working 50 hours a week at a large architecture firm in New York. Teams working on competitions put in 90-hour weeks, without additional pay, he said. “Because you don’t get overtime, then the time is not really valued,” says Hamlyn, 27. “So they just make you work and work and work.” Hamlyn, who is now an intern architect in Montreal and paid hourly, requested that the name of the firm be withheld, since he considers the problem endemic to the industry.
Firms may soon have to pay more attention to how their businesses operate, scrutinizing how much they charge clients and how late employees stay at the office. “If you don’t have abor laws, you’re not going to understand how labor actually figures into your business plan,” says Peggy Deamer, professor at the Yale School of Architecture and a principal at Deamer Architects. “That kind of loose, naive take [on labor] goes hand in hand with a discipline that doesn’t see itself as a business, but sees itself as an art.”
But other architects interviewed for this story say few of their colleagues are discussing the changes, and some are unaware that labor laws even apply to salaried employees. Several firms declined to comment, including Kohn Pedersen Fox Associates, Skidmore, Owings & Merrill, and Robert A.M. Stern Architects. “Folks at firms aren’t too enthusiastic about sharing their thoughts on the potential impact of the new rule,” Matthew Tinder, a spokesperson for AIA, said in an e-mail. The AIA declined to comment any further.
Critics of the changes argue that architecture salaries are often lower than other skilled professions because of the nature of the business. “Our clients don’t want to pay the higher fees,” says Craig Williams, the chief legal officer of HKS Architects, describing the new rules as a government intrusion on the private sector. Some firms will have to raise client fees, potentially making it difficult to compete against firms that can absorb higher labor costs. “There is always someone down the street who’s willing to take a project on for a lower fee,” Williams said.
But clients might be willing to pay more, particularly in a heady real-estate market where architecture is in demand. By giving employees a raise, firms might end up getting one too. Rena Klein, the principal of RM Klein Consulting, which works with small architecture firms, says: “Along with people being underpaid, people are undervaluing themselves in the marketplace.”