Overtime for Some

Obama administration releases final rules to require new payments for many employees. Regulations make clear that higher ed employees considered teachers will continue to be exempt. Postdoc pay could be key issue going forward.

May 18, 2016
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The Obama administration Tuesday night released final rules -- feared by many higher education administrators but eagerly awaited by some employees -- that will require employers to make overtime payments to millions of workers who aren't now eligible. The administration also reiterated many exemptions in established law for higher education employees (those who can be seen as teachers). And those exemptions may disappoint some adjuncts, postdocs, graduate student employees and many research assistants who had hoped the new rules would increase their paychecks.

Many postdocs who do not have significant teaching duties would now, in theory, be eligible for overtime. But the Obama administration endorsed efforts to raise their pay to levels where they would not be eligible.

The key part of the new regulations will increase from $23,660 to $47,476 the pay level below which salaried employees at virtually all companies and employers are presumed to be eligible for overtime. That increase is significant in that it includes many higher education employees who have not historically been eligible for overtime. Further, the new level will be adjusted upward every three years to reflect changes in the cost of living.

The American Council on Education immediately criticized the new rules. "The new rule will turn many lower-level, salaried employees into hourly workers who are eligible for overtime pay. But requiring such a dramatic and costly change to be implemented so quickly will leave many colleges with no choice but to respond to this regulation with a combination of tuition increases, service reductions and, possibly, layoffs," said a statement by Molly Corbett Broad, president of the council.

"We appreciate the department’s willingness to reconsider slightly its initial proposal to raise the threshold even higher. But negatively impacted by the new regulations are a wide array of nonfaculty employees -- from athletics coaches and trainers to admissions recruiters and student affairs officers -- whose work is not well suited to hourly wage status and who will face diminished workplace autonomy and fewer opportunities for flexible work arrangements and career development."

Randi Weingarten, president of the American Federation of Teachers, immediately praised the new rules. "For thousands of AFT members who work long hours for their patients and students without receiving fair overtime, including public employees, nurses and administrative workers in schools and colleges, their pay will finally reflect their hard work," she said.

The Obama administration on Tuesday released both an overview and detailed guidance for colleges and universities on how to carry out the new rule. The guidance stresses that many college employees are exempt from the new rules because they are considered teachers. Privately, some higher education lobbyists indicated that everything in the guidance was simply a restating of existing federal law -- and that these explanations did not minimize the increased expenses to be face by colleges. The exemption for teachers is not new, but the salary level for requiring overtime was so low that there wasn't as much consideration of how to apply the exemption.

The teaching exemption applies to a range of college employees:

  • Anyone whose primary job duty is instruction. This applies equally to adjuncts or graduate teaching assistants based on their job duties, not just to those on the tenure track.
  • Students in research jobs under the supervision of a faculty member while in the course of a degree program.
  • Coaches and assistant coaches "if their primary duty is teaching, which may include instructing athletes in how to perform their sport. If, however, their duties primarily include recruiting athletes or doing manual labor, they are not considered teachers."
  • Some academic personnel involved in advising or helping students, provided that these employees' salaries match the entrance pay for teachers at the institution.

Many other groups of employees -- including those in admissions, student affairs and many other divisions -- would be covered by the new rules.

What About Postdocs?

One of the groups of higher education employees most discussed in the context of the new rules is postdoctoral fellows.

Many postdocs earn less than the new threshold, and many work long hours, striving to make enough progress on their research to win a permanent faculty job. Numerous reports have said that postdocs are underpaid. At the same time, some research universities and some postdocs have feared that requiring overtime payments would result in institutions and the federal government reducing the number of postdoc slots.

The National Postdoctoral Association, in responding to an earlier version of the regulations, said it feared the way some universities might respond to requirements to pay overtime to postdocs. "Without additional funding to offset the increased cost, institutions may reduce the number of postdoctoral scholars they employ. Additionally, institutions might choose to move postdoctoral scholars into nonemployee classifications, thus potentially decreasing postdoc salary, and eliminating access to employer-sponsored health insurance and other employee benefits," said a statement from the association. At the same time, the group said that postdocs should be earning $50,000 or more -- a salary level that would remove the overtime issue.

The overview from the U.S. Labor Department said that "postdoctoral researchers in the sciences who engage only in research activities and do not teach are not covered by the teaching exemption. These employees are generally considered professional employees and are subject to the salary threshold for exemption from overtime."

But the department also said that "many postdoctoral researchers in the humanities also teach. To the extent that they have a primary duty of teaching, they will be subject to the teaching exemption and not entitled to overtime compensation."

In the detailed guidance released by the department, it said that it would promote increases in postdoc pay, noting the influence of policies of federal agencies such as the National Institutes of Health. Further, it said that many universities that want to avoid overtime payments to postdocs could likely raise postdoc pay to above the threshold level. "Many postdoctoral research fellow salaries are close to the new salary level," and "not more than a few thousand dollars a year" away from the new level to avoid overtime payments, the guidance said.

The department also said that, in cases where postdocs are owed overtime pay, universities may use any system that is "complete and accurate. For example, a higher education institution may ask postdoctoral fellows to record their own times."


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