Running for political office is about to get astronomically more expensive, thanks to a new rule issued by the Obama administration.
Last month, the Labor Department decided to expand the universe of workers who are entitled to overtime compensation — that is, time-and-a-half pay for working beyond 40 hours per week. Starting later this year, salaried workers earning up to $913 a week, or $47,476 annually, will be covered by overtime protections.
That’s double the current threshold of $455 per week, or $23,660 annually.
As expected, the announcement was met with anger by business groups. It also inspired think pieces about what might become of “Devil Wears Prada”-type prestige jobs, at glossy magazines and fashion houses, in which young-scrappy-and-hungry talent log ludicrously long hours for low pay just to get a stilettoed foot in the door.
But another sector that will be completely upended by the new rule is America’s political-industrial complex, which employs tens of thousands of people at the height of election season.
“I don’t know how they’re going to cope with it,” Trevor Potter, former Federal Election Commission chairman and general counsel for John McCain’s presidential campaigns told me.
Political campaigns rely on armies of fresh-out-of-school idealists willing to work long hours for peanuts. One back-of-the-envelope analysis from Hamilton Place Strategies, an economic and public affairs consulting firm, found that junior staffers on Senate campaigns typically clock 69 hours a week, at an average salary of $25,000.
Under the new Labor Department rule, such a worker would receive about $27,000 in overtime, if the work took place over a full year. That means she’d receive more in overtime pay than she would in base salary.
Political campaigns are affected by the rule because they’re usually incorporated as nonprofits, which, like other private employers, are subject to Labor Department regulation and oversight. Workers employed directly by the Senate and House, however, will not be covered by the new rule, because Congress sets and enforces its own parallel employment laws.
Legislators might ultimately decide to live by the same rules private businesses are subject to. Some congressional offices tell me they’re already voluntarily complying with the Labor Department’s overtime decision. The last time the Labor Department raised the overtime threshold for the private sector (in 2004, to today’s $23,660 level), though, Congress never legally matched it.
In any case, campaigns are off the hook this election cycle, since the rule goes into effect in December. Pretty soon, though, the economics and culture of political organizations may need to be rewritten. Complying with the rule could make running for office far costlier, require massive layoffs, or both.
A campaign could, for example, raise everyone’s salary above that $47,476 threshold, so overtime protections no longer apply. Or it could try to redistribute workloads so no one ever works more than 40 hours, though that would require hiring more staff and thus increasing the payroll budget.
Alternatively, a campaign could reallocate an employee’s earnings between base pay and overtime, so that the first 40 hours of work are paid at a lower rate but the amount received by the employee after extra hours are included remains about the same.
Even this solution would increase administrative costs; campaigns would have to more closely track workers’ highly erratic hours, since overtime must be paid according to the actual number of hours worked each week. And the option would not be available if it required lowering base pay beneath the legal minimum wage (as would be the case for that prototypical 69-hour-a-week, $25,000-a-year staffer).
Campaigns could also just dump more work onto unpaid volunteers. But several campaign managers I spoke with cautioned that “you get what you pay for.”
Campaign veterans also worried that the new rule might tempt campaigns to skirt the law, either by misreporting hours or misclassifying employees as independent contractors to exempt them from overtime protections.
“I don’t see how it’s actually going to be regulated and verified,” said Bradley Crate, chief financial officer for Mitt Romney’s 2012 presidential campaign and founder of the political consulting firm Red Curve Solutions. “I’ve never seen a government agency successfully track anything like this in real time.”
Even Democratic campaign veterans, who generally support using government muscle to raise labor standards, express mixed views about what this will mean for their industry.
“On the one hand, everybody should be paid enough so that they can live, regardless of what they do,” said Gina Glantz, who ran Bill Bradley’s 2000 campaign. On the other hand, she said, “The more people involved in politics, the better in my view. If this ends up limiting that, it’s unfortunate.”
Presumably some private businesses feel the same about their own industries, too.