Colleges and universities are determining how to move forward now that the Obama administration's proposed rule to extend overtime benefits to more workers rests in limbo.
Under the Fair Labor Standards Act, the federal government requires employers—including colleges and universities—to offer overtime pay to employees who earn less than $23,660 per year.
The threshold would have been raised to $47,476 by a new rule that was set to take effect on December 1. A draft of the rule with a slightly higher salary threshold was estimated to affect nearly 900,000 higher education employees. The change would not have affected employees who spend most of their time teaching, as well as certain other employees whose primary job is supporting students, such as some advisors.
Last month, a federal judge in Texas issued a preliminary injunction blocking the rule. The Justice Department said it is reviewing the ruling and is considering further action. According to CUPA-HR, the Labor Department is likely to make a swift appeal of the ruling, but the timeline for such action is unknown. Some experts argue it is unlikely that the new rule would be restored under the incoming Trump administration.
Learn more about the proposed overtime rule
Some institutions move ahead with pay raises
While they currently are under no legal obligation to do so, some colleges and universities are keeping their original plans to provide pay increases to some workers and to convert other employees' status to be exempt from overtime pay.
Otterbein University already made about 40 employees eligible to receive overtime pay as hourly workers prior to the injunction, in addition to increasing the salaries of some employees beyond the new threshold. The university does not plan to reverse these decisions.
Campbellsville University also increased the salaries of more than 20 full-time employees and made about a dozen other employees eligible for overtime pay as hourly workers. However, Campbellsville President Michael V. Carter says the injunction "has come as welcome news," as the "rule increase[s] the cost of higher education."
Others press pause
Some institutions are waiting to change employee pay or status until the new rule is finalized. Colleges and universities that did not inform employees about changes prior to the injunction may have felt they had more freedom to wait, according to Andy Brantley, president and CEO of CUPA-HR.
"The University of Michigan did what many schools did which was to pause on that implementation and wait to see until this gets clarified by the courts," says university spokesperson Rick Fitzgerald.
Boston University (BU) will increase the salaries of about 175 employees who had been informed about the rule, but another 360 workers will not be made eligible for overtime pay. "We'll wait until the courts make a decision, and then we'll take whatever action we need to," says Diane Tucker, BU's chief HR officer.
Get the most out of your financial dashboards
Other institutions holding off on changes include:
- California State University system;
- Edgewood College;
- Purdue University;
- University of Oregon;
- University of Wisconsin-La Crosse; and
- University of Wisconsin-Madison.
Pay for postdocs complicated
A number of institutions and government agencies planned to increase salaries for postdocs because it would be more cost-effective and simpler to boost wages instead of tracking postdocs' hours. Some institutions moving ahead with pay increases include:
- Duke University; and
- University of Minnesota.
Further, the National Institutes of Health (NIH) will raise the minimum salary for postdocs who are paid through the organization's grants to $47,484.
Keep your board focused on the most pressing finance issues
"A lot of places follow the NIH's example," says Kate Sleeth, chair of the board of the National Postdoctoral Association, which has advocated for a minimum postdoc salary of $50,000. "If institutions don't increase their salaries, or they go hourly, I think eventually the numbers of postdocs who are attracted to those institutions will dwindle" (Nowogrodzki, Nature, 12/2; Brown/Barlow, BU Today, 11/29; Savidge, La Crosse Tribune, 12/5; Gordan, Michigan Radio, 12/1; Savidge, Wisconsin State Journal, 12/2; University of Oregon press release, 11/28; Colombo, Indianapolis Business Journal, 12/5; Gardner, Chronicle of Higher Education, 11/30).
Next in Today's Briefing
5 predictions: How Trump's administration could change higher ed