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Business and Policy Areas
Business and Policy Areas
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Proposed Overtime Pay Salary Threshold Is Too High, Higher Ed Groups Say

September 8, 2015

On September 4, NACUBO joined 17 higher education associations in a letter to the Department of Labor (DOL), responding to a July 6 notice of proposed rulemaking that makes significant changes to the overtime provisions of the Fair Labor Standards Act (FLSA).

As NACUBO previously reported, President Obama issued an executive order last year expanding overtime, leading the department to publish the proposed rules. DOL also created an overtime resource page, including a fact sheet on the proposed rule.

The letter, spearheaded by the College and University Professional Association for Human Resources (CUPA-HR), expresses concerns with the proposal that would significantly increase the salary threshold for when an individual qualifies as a worker exempt from overtime pay requirements. DOL estimates that for 2016 the annual threshold will be $50,440—an increase of 113 percent over the current annual threshold of $23,660.

DOL further proposed an automatic annual increase of the minimum salary amount and sought comments on whether the standard duties tests are working as intended.

In the letter, the higher education associations state, "We agree that an increase to the minimum salary threshold is due and that DOL must update the salary levels and regulations from time to time to ensure the exemptions are not abused. The proposed minimum salary threshold, however, is simply too high." 

The letter also extensively illustrates the unique challenges colleges and universities would face in implementing the new rules. The associations urge DOL to lower the proposed salary level for nonprofit employers and to phase in the new salary level over time to allow employers and employees time to make all necessary planning, budgeting, and systems preparations.

Concerned with the proposal to establish annual automatic indexing of the FLSA salary threshold, the groups assert they "do not believe DOL has the authority to impose automatic updates, and even if it did, the agency should not automatically update the salary level, as doing so will also negatively impact institutions' budgets and budget planning, their ability to provide merit-based increases, and employee morale."

DOL will review the comments and issue a final rule in the coming months.

Contact

Mary Bachinger
Director, Tax Policy
202.861.2581
E-mail

Liz Clark
Director, Federal Affairs
202.861.2553
E-mail