NACUBO

My NacuboWhy Join: Benefits of Membership

E-mail:   Password:   

 Remember Me? | Forgot password? | Need an online account?

Business and Policy Areas
Business and Policy Areas
Loading

The FLSA Overtime Rule Conundrum

February 7, 2017

By Karla Hignite

Colleges and universities are responding in a variety of ways to the changes they had implemented, or were in process of implementing, to comply with the U.S. Department of Labor’s Fair Labor Standards Act overtime rule, which was set to take effect Dec. 1, 2016. On Nov. 22, 2016, a preliminary injunction by a U.S. District Court judge from Texas postponed the effective date indefinitely, leaving employers uncertain about future enactment of the FLSA rule. Reported strategies among NACUBO members include proceeding with the new salary threshold; moving employees from exempt to non-exempt status but maintaining current salary levels for previously exempt employees; delaying implementation of all changes until final disposition of the regulations are made clear; and continuing to deliberate appropriate action in the face of uncertainty about whether the overtime rule will ultimately be upheld.

MIXED RESPONSES

In early December 2016, CUPA-HR surveyed its members to assess the actions taken by institutions in response to the injunction. Of the 495 responding institutions, when asked to characterize their institution’s response to the delayed implementation of the rule, approximately equal percentages had opted to go forward with implementing all planned changes (28.1 percent), delay all planned changes (31.7 percent), or implement some and delay some changes (32.1 percent). Only 8.1 percent of respondents indicated they would roll back or reverse at least some of the changes already implemented.

Other notable reactions:

  • While there were no significant differences in approach based on institution size, public institutions were least likely to have implemented all changes and were most likely to reverse ones already implemented. Private religious institutions were most likely to either implement all changes or delay all changes. And, private non-religious institutions were least likely to delay all changes or to reverse changes they had already made.
  • Among institutions responding that they would implement some changes or delay some changes, the change that institutions were most likely to proceed with was raising salaries of one or more professional positions above the threshold (70 percent). The change that institutions were most likely to delay was reclassifying one or more positions from exempt to non-exempt (77.4 percent).
  • Of the doctoral institutions responding to the question of what they planned to do regarding raising postdoctoral fellow salaries above the $47,476 threshold, 41.2 percent had plans to implement or proceed on this without delay, versus 21.6 percent that planned to delay this action.
  • Among those institutions that indicated plans to reverse some changes, most likely to be reversed was changing back to exempt status some or all the positions changed to non-exempt status (95 percent). Far fewer had plans to reverse salary adjustments made to some or all positions (22.5 percent).

MISSED OPPORTUNITIES

Andy Brantley, CUPA-HR president and CEO, suggests the injunction would have been welcome news six months ago. “Receiving this news mere days before the implementation date caused much disruption as campus leaders had to scramble to determine how they should address the news.”

While CUPA-HR fully supports a long-overdue increase to the current salary threshold of $23,660, the association opposed the Obama administration’s plan to move it to $47,476. “In our first meeting with the secretary of labor and his staff during May 2014, we acknowledged the need to increase the threshold and recommended that it be changed to the low- to mid-$30,000 range,” says Brantley. “Had the secretary and his colleagues implemented a new salary threshold at or near the level we recommended, I believe no injunction would have been filed and we would now have a much more reasonable threshold in place.” For now, says Brantley, it is “wait and see” to determine what, if any, changes will be made to the Fair Labor Standards Act.

Full survey results are available from the CUPA-HR website.

Karla Hignite, editorial consultant to NACUBO, is editor of NACUBO's HR Horizons; e-mail: karlahignite@msn.com