Department of Labor Releases New Overtime Rules

ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Budget_Models_and_Process_Challenges_Facing_Institutions_Today.html">Budget Models and Process: Challenges Facing Institutions Today
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Hiring_for_a_Global_Campus—Why_a_Textbook_Approach_Will_Not_Work.html">Hiring for a Global Campus—Why a Textbook Approach Will Not Work
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Higher_Education_Analytics_and_Data_Driven_Decisions.html">Higher Education Analytics and Data Driven Decisions
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Common_Compliance_Pitfalls_with_Study_Abroad_Programs.html">Common Compliance Pitfalls with Study Abroad Programs
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Net_Tuition_Revenue_Price_and_Enrollment_How_Can_you_Achieve_Balance.html">Net Tuition Revenue, Price and Enrollment: How Can you Achieve Balance?

April 23, 2004

Final regulations from the U.S. Department of Labor (DOL) mark the first expansion of the overtime pay rules in 50 years. Under the new rules, due to be published in the Federal Register on April 23, more low-wage workers will be automatically eligible for overtime. In addition to expanding access to overtime, the rules also more clearly spell out the categories of employees who are exempt from the overtime provisions of the Fair Labor Standards Act, as well as streamline and clarify the old rules to address contemporary occupation categories. The final rules appear to include some provisions recommended by the higher education community in comments submitted to DOL last July.

Section 13(a)(1) of the Fair Labor Standards Act (FLSA) provides an exemption from both minimum wage and overtime pay for "white collar" workers. This includes employees serving as bona fide executive, administrative, professional, and outside sales employees. Certain computer employees are also exempt.

Impact on Colleges and Universities. NACUBO joined the American Council on Education and College and University Professional Association for Human Resources comments to DOL on the proposed regulations. The community comments were generally supportive of the proposed regulations, published in March 2003.

The final rules adopted a provision recommended by the higher education community specifying that academic counselors are considered exempt from FLSA overtime provisions under the administrative employees exemption for workers at educational establishments.

The Department of Labor has created a new Web site section, called FairPay, dedicated to explaining the new overtime rules. Some of the FairPay resources are listed below.

The NACUBO contact is Mary M. Bachinger, director, tax policy, advocacy and issue analysis.