Overtime Woes

Obama administration's proposed rules would extend overtime protections to millions -- including many postdocs and other employees in higher ed. Would the plan provide overdue relief or be a financial disaster for colleges and universities?

February 25, 2016

On her busier weeks, when she’s out in the field, Carly Ebben is sure she works more than 40 hours.

But it varies. When she’s at the University of California at Berkeley, she works less. When she’s out conducting research, she works more. She isn’t sure how much more. Like most postdoctoral researchers, Ebben is a salaried employee, and she’s never had to track her hours. She isn’t paid for overtime.

Had she been making less money, things would be different. Under the Fair Labor Standards Act, employees making under $23,660 are guaranteed overtime pay, while certain white-collar employees making more are considered exempt.

Most postdocs make considerably more than $23,660, disqualifying them from mandatory overtime protections. So do most librarians, financial aid administrators, admissions officers, coaches and IT workers.

But over the summer, President Obama announced a proposal that would raise the salary threshold to $50,440. If the change goes through, white-collar workers making less than $50,440 will be guaranteed overtime pay if they put in more than 40 hours a week.

In higher education, the change would reclassify thousands of workers across the country. Colleges would be required to pay these professionals for any time worked over 40 hours a week -- or else raise their salaries significantly to get over $50,440.

For struggling workers making less than $50,440, the change could mean more money in an uncertain job market. The Fair Labor Standards Act’s exemption was originally meant only for highly compensated employees, and in 1975, 62 percent of full-time salaried workers fell below the government’s threshold. Now, that number is 8 percent.

But colleges are worried. To comply with the new law, they will be forced to pay millions of dollars in overtime pay and increased wages. And once the new rule is announced -- if it’s announced -- they could have as few as 60 days to comply.

“There is general agreement that the salary threshold is long overdue for a change, but the transition -- such a huge transition -- to $50,440 is a major concern,” said Andy Brantley, president of the College & University Professional Association for Human Resources. “Every area of campus would be impacted.”

When the Department of Labor opened public comments, CUPA-HR submitted a letter signed by 18 other higher education groups. Sixty days is simply too short, the letter argued, and the $50,440 threshold is simply too high. Instead, the group proposed three lower options: $29,172, $30,004 or $40,352.

There’s no doubt that the change would be expensive for colleges. At Florida’s state university system, over 6,500 employees would be affected, according to El pagnier K. Hudson, an assistant vice president of human resources at Florida International University. Increasing those employees' salaries to meet the new threshold would cost more than $62 million.

But colleges have options: they can increase salaries, or they can pay overtime wages. Most will likely do a bit of both. At Indiana University, depending on how the university system decides to comply, the new law could cost it anywhere between $5 and $15 million.

And increasing some employees’ salaries could have a kind of ripple effect: What if, when an employee’s salary is raised to meet the new threshold, she is making as much as her supervisor? To preserve salary equity, the supervisor’s salary may also need to be raised.

“There are no dollars that are coming with the regulation,” Hudson said. “They’re just saying, ‘Make it happen.’”

Yet another concern has been raised by the National Postdoctoral Association, which favors higher salaries for postdocs, but fears how colleges and universities may react to the rule. The association's statement to the government says some institutions may cut the number of postdocs they employ to raise the salaries or pay overtime to others. Another fear, is that institutions may try to reclassify postdocs as non-employees.

'Perpetual Scarcity'

But for many college and university employees, working long hours and taking home smaller paychecks, institutional finance doesn't seem quite so pressing.

Erin Clark spends 60 hours a week in the lab and makes $44,556 a year. She’s wanted to be a scientist since high school, and she’s spent 13 years of her adult life in college and graduate school, but she didn’t know she would have to make so many sacrifices. She expects to work as a postdoc for three to five more years.

Her story is personal, and it isn’t backed up by legions of education organizations. But last year, in late August, she typed it up and submitted it to the Department of Labor, where it lives along with the comments from human resources groups and state university systems.

“I went to college, I got a Ph.D. and now I make less than $15 an hour and work in an environment that is constantly pressuring me to work more,” she wrote. “How could someone in my situation raise a family?”

“Not being able to afford modern conveniences that would help alleviate the stress of such a workload means living in a state of perpetual scarcity,” wrote James Irving, a postdoc at the University of Maryland.

“Even teaching 10 classes I made under $20,000 and qualified for government assistance,” wrote Jeffrey Nall, a former adjunct in Florida.

The regulation would have an immense reach in higher education, with one caveat: even under the new law, adjuncts -- along with most faculty members -- won't qualify for overtime protections. They fall into a special exemption for teachers, and they can be denied overtime even if they fall below the salary threshold.

Yet faculty members frequently work overtime without receiving compensation. They are pressured to volunteer for certain duties, the Service Employees International Union wrote in its comment letter, and they’re afraid that they won’t be rehired if they refuse.

Of adjuncts working in part-time positions, 40 percent work 40 or more hours a week, according to New Faculty Majority, which advocates for adjunct and contingent faculty. The group also submitted comments, asking that contingent faculty be covered.

“When the act was originally devised and the exemption was applied to contingent faculty, it was a vastly different situation than it is today,” said New Faculty Majority President Maria Maisto. “The framers of the act presumed that being a college professor is a stable profession.”

Mass Reclassification

If the regulation goes through, it will reclassify large numbers of employees all at once: 1,400 at Indiana University, 1,034 at Kansas State University, 2,700 at the University of Iowa.

But many of those employees work odd hours, colleges argue, with schedules that fluctuate from week to week. Admissions officers may travel more during busier times of the year. Coaches work longer hours depending on the season. Postdocs conduct research that won’t conform to a nine-to-five schedule.

The idea here is that higher education is somehow different. That the new rule works well for retail employees and restaurant workers, but not for postdocs and librarians.

“The reality is that organizations don’t necessarily have that extra funding, so the result will be paying the employee the same amount they make now and restricting their hours,” said John Whelan, Indiana University’s associate vice president for human resources.

They’ll be expected to finish their work in 40 hours each week, even though they’re used to having more time, while employees who meet the threshold will have more flexibility. (“They can check emails at random hours,” Whelan said. “They can do work on weekends if they need to.”)

And forced into a 40-hour week, some employees may ignore the restrictions. Maybe they feel that they need more time; maybe they need to be more productive to compete for a promotion; maybe they just love their work. But under the law, employees cannot opt out of overtime.

“If it’s determined that that individual worked more than 40 hours in a workweek and was not paid overtime,” Whelan said, “then there’s a compliance issue.”

In some colleges, there are real and unspoken differences between hourly and salaried employees, and issues of morale and fairness could also come into play. Depending on an employee’s classification, she might receive different parking privileges or retirement plans. And when an employee suddenly becomes nonexempt -- and starts getting paid on an hourly basis -- she may view it as a drop in status.

“There are perceptions in some organizations that an exempt position is a more valuable position,” Whelan said. “There’s a perception of importance.”

But Ebben, the postdoc from the University of California, wouldn’t argue with a higher paycheck. She understands the concerns about switching to an hourly schedule -- it’s impractical, she said, to track a postdoc’s erratic hours -- but she hopes that the rule will encourage colleges to raise salaries.

“This regulation is intended to help skilled workers, and that’s basically the definition of a postdoc,” she said. “All we’re really asking is to be fairly compensated for the contributions that we make.”

She is committed to a career in academia, and she knew it wasn’t going to be easy. But the Bay Area is expensive, and her husband is a postdoc, too. “It’s been a struggle,” she said, “to get by on two postdoc salaries.”


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