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President to President
Molly Corbett Broad's weekly email newsletter to higher education leaders

CURRENT EDITION May 16-20, 2016 ~ Vol. 17, No. 13

​The Department of Labor (DOL) released its final rule on overtime pay this week, and the takeaway for higher education is that campuses could be in store for a difficult time in the coming months. We will be working to help our institutions understand the costs and administrative complexities of implementing these changes, even as we continue to press for improvements to the new rule, which goes into effect Dec. 1. Also, I hope you have had a chance to take a look at our issue brief on the Obama administration’s new guidance on transgender students we sent on Tuesday. I have an overview of that issue below.


  •  New Overtime Rule’s Impact on Higher Education Likely to Be Significant

    ​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 employees.

    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.

  •  ACE Issue Brief Summarizes New Federal Guidance on Transgender Students
    ​As I mentioned to you on Tuesday, the Departments of Education and Justice released joint guidance last week to help educational institutions—colleges and universities, as well as PreK-12 schools—understand their responsibilities to serve transgender students. With the assistance of Hogan Lovells US LLP, we put together an issue brief on the guidance document released by the federal agencies. It looks at select aspects of the guidance and answers possible questions campuses may have, such as how institutions must refer to transgender students; whether and how to provide sex-segregated facilities to transgender students; and more. The issue brief is intended as general guidance only, and does not constitute legal advice.
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