Currently, professional and managerial employees making more than
$23,660 a year are generally exempt from federal Fair Labor Standards
Act (FLSA) overtime regulation. Under DOL’s new overtime pay rule,
employees will have to be paid more than $47,476 to be exempt. Those
making below that amount will be classified as hourly workers eligible
for overtime pay, which will impact a wide array of non-faculty
employees—from athletics coaches and trainers to admissions recruiters
and student affairs officers—whose work is not well suited to hourly
wage status. The new level will be adjusted every three years to reflect
changes in the cost of living.
DOL released its proposed rule in July 2015, after being
charged by President Obama in 2014 to revise the regulation governing
exemptions to FLSA overtime pay requirements. Along with a number of
higher education associations, we submitted comments
on the proposed rule that identified a range of problems. None of these
problems appear to have been addressed in the final rule, which is more
than 500 pages.
The Obama administration has issued both an overview and more detailed guidance
for colleges and universities on how to implement the new rule.
However, these documents merely restate current law provisions that were
not changed by the new rule. We had hoped the final rule would provide
some relief related to postdoctoral researchers because their salaries,
set by federal grant-making agencies, are often below the new threshold.
Unfortunately, the new rule will treat these researchers like other
As I said in a statement
on Tuesday, while in principle we support raising the wage threshold,
requiring such a dramatic and costly change to be implemented so quickly
will leave many colleges with no choice but to respond to this
regulation with a combination of tuition increases, service reductions
and, possibly, layoffs.
Sen. Lamar Alexander (R-TN), chair of the Senate Health, Education, Labor and Pensions Committee, announced Wednesday
that he will introduce a congressional resolution to block the new
overtime rule, saying it will result in increased tuition for college
students in Tennessee and elsewhere.
ACE will convene a panel of experts for a June 17 live
webcast to further explore the complexities and challenges campuses will
face in implementing these new requirements. More information on how to
register will be provided soon.