As new overtime labor laws go into effect in 2017, there is a shakeup on the horizon for the meeting industry.
Many conferences and conventions consider themselves a “destination event.” Destination events are held in a desirable host-city and piggyback on a holiday, weekend or school vacation schedule. These events are a way for meeting planners to attract more attendees to their events, and for corporate attendees to leverage the travel support they receive to get to the event.
However, as new labor laws go into effect in the U.S. in 2017, salaried employees that make less than $47,476 per year may have to be paid overtime if they work more than 40 hours per week…unless they qualify with the following exemptions from the Department of Labor.
Be salaried, meaning that they are paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”);
Be paid more than a specified weekly salary level, which is $913 per week (the equivalent of $47,476 annually for a full-year worker) under this Final Rule (the “salary level test”); and
Primarily perform executive, administrative or professional duties, as defined in the Department’s regulations (the “duties test”).
Certain employees are not subject to either the salary basis or salary level tests (for example, doctors, teachers and lawyers). The Department’s regulations also provide an exemption for certain highly compensated employees (“HCE”) who earn above a higher total annual compensation level ($134,004 under this Final Rule) and satisfy a minimal duties test.
This means that event organizers will probably have to put some serious calculations into their decision whether or not their budget can handle the impact of holding events over government holidays and weekends. The law has the potential to cost both event organizers and SMB companies that send employees to attend/exhibit at these events significantly more money. According to Payscale.com, the average meeting planner salary nationwide is $44,447, which could mean overtime pay is mandatory.
Full staff: Increased cost for meeting planners
For the meeting professional team that plans and executes events, the event itself is never the only time they put in on the job. Most event planning staff work a full week planning events and managing the logistics of the daily business in addition to working the actual events themselves. This often means long weekends and working holidays on top of the full-time position they maintain during the week. For the event planning company, this is going to mean overtime pay for employees working these events if they are salaried at less than $47,476/year.
With this law, it is going to cost meeting professionals more money for their employees to plan and attend events on holidays and weekends.
Cost-saving choices: Corporate attendees and exhibitors
The same negative effect on ROI is going to arise for the companies that attend and exhibit at events that take place over weekends and holidays. They are going to have to pay more to send employees who earn less than $47,476/year to events that result in them working overtime.
This has the potential to decrease employee attendance, corporate exhibitors and sponsorship at events that are planned on weekends and holidays. Companies may instead choose to send employees to events that fall during the week (and their 40 hour/week threshold) rather than weekend and holiday events to save money.
The bottom line: ROI
The bottom line is that this change may cost meeting professionals, corporate attendees and exhibiting companies more money to have a presence at events held over holidays and weekends. If companies don’t comply with this change, it is going to creep up costs pretty quickly and negatively impact ROI for these events. This may be an even bigger issue in states such as California, where overtime is counted on a per-day basis (more than eight hours/day) rather than an over-40-hour work week. It’s important to check with your state’s labor laws ahead of time.
This leaves the meeting industry with two choices: increase rates for weekend and holiday events to cover the additional labor costs, or change their dates. The second seems like a better option to me. I personally hate to give up family time and holidays to attend events, especially if they are going to cost my business more money. I would like my three-day holiday weekends to spend time with my family, not vacation with them and partially share time with my customers. I know many divorces begin when the husband asks the wife (and vice-versa) to vacation over a conference weekend but he/she’s not around to share time with the family. Let’s preserve holiday weekends for vacations and family time. There aren’t enough of them as it is!