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NACUBO recently joined 18 higher education associations in a letter to the Department of Labor (DOL), responding to a March 22 proposed update to the salary threshold for the “white collar” exemptions to the overtime provisions of the Fair Labor Standards Act (FLSA).

The update formally rescinded the Obama rule of 2016, which had doubled the minimum salary threshold to $913 per week (or $47,476 per year) and imposed automatic updates to the threshold every three years.

The March 22 notice from DOL proposes:

  • Increasing the current (2004) level of $455 per week ($23,660 annually) to $679 per week ($35,308 per year).
  • Requiring an update of the threshold every four years through notice-and-comment rulemaking.
  • Allowing the Secretary of Labor to suspend any update based on economic circumstances or “any other reason.”

The group letter, spearheaded by the College and University Professional Association for Human Resources (CUPA-HR), expresses support for DOL’s revised approach to the salary threshold as well as its adoption of the 2004 methodology to set salary level updates. 

Citing employment scenarios unique to college and university employers, the letter suggests that DOL:

  • Permit employers to prorate the salary threshold for part-time employees.
  • Count the cost of employer-provided room and board toward the salary threshold.
  • Update the salary threshold every five to seven years, based on circumstance, rather than on a rigid schedule of every four years.
  • If automatic updates are adopted, DOL should clarify that any change to the methodology used to determine the standard salary level be made via multiple proposed rulemakings.

Following DOL’s review of the public comments to the March proposed rule, it is unclear when a final rule is expected.

Contact

Mary Bachinger

Director, Tax Policy

202.861.2581


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