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Thousands of employees at colleges and universities, including admissions officers, student affairs professionals and athletics staffers, could become eligible for overtime pay under a new proposal from the Biden administration.
Currently, salaried employees who make more than $35,568 a year and work in an “executive, administrative, or professional capacity” are exempted from receiving overtime pay when they work more than 40 hours in a week. The Biden administration wants to raise the salary cutoff for these “white-collar exemptions” to $55,068—a 55 percent jump that could expand overtime eligibility to 3.6 million salaried workers across all sectors of the economy.
The shift could mean big changes to lower-paid salaried jobs at higher education institutions, though faculty members and nonfaculty workers focused primarily on teaching wouldn’t be affected because of a teaching exemption in federal labor law. If the proposal becomes final, colleges and universities would have to increase the affected employees’ pay to exempt them from overtime or figure out how to track their hours. Making the employees hourly or raising their salaries could lead to tuition increases or service reductions, institutions have said. (Note: This paragraph has been updated to reflect the fact that the teaching exemption applies to faculty members and non faculty workers focused primarily on teaching.)
Higher education groups have also argued that raising the threshold would be costly and hurt institutions that are still struggling to recover from the economic ramifications of the COVID-19 pandemic. Proponents of a higher threshold say the current rules lead to overwork and underemployment and that a stronger rule would ensure that hard work is rewarded.
“For too long, many low-paid salaried workers have been denied overtime pay, even though they often work long hours and perform much of the same work as their hourly counterparts,” said Jessica Looman, principal deputy wage and hour division administrator at the Labor Department, in a statement. “This proposed rule would ensure that more workers receive extra pay when they work long hours.”
The Department of Labor will accept public comments on the rule for 60 days once it’s published on the Federal Register. The agency will then review and respond to those comments before issuing a final rule, which would take effect 60 days after it’s published. But the change will likely face legal challenges that could block or delay its implementation.
The Biden administration’s proposal resurrects a 2016 effort during the Obama administration to raise the threshold to $47,476—a move higher education groups opposed. The Obama proposal was blocked by a federal judge before it went into effect. In 2019, however, the Trump administration successfully raised the threshold by a smaller amount, from $23,660 to $35,568.
Kevin McClure, an associate professor of higher education at the University of North Carolina at Wilmington who has studied higher education workplace issues, said the coming fight over overtime will likely highlight how “wages have been suppressed in higher education.”
“The federal government’s understanding of what’s fair labor and how to compensate fair labor and what constitutes a living wage is moving faster than in higher ed,” he added.
Following the pandemic, McClure said, there’s greater institutional awareness of workload and compensation issues as colleges have struggled with employee turnover and burnout, though he’s not sure how that awareness will translate to the overtime debate.
McClure, who is writing a book about reimagining the higher education workplace, said there are several jobs on college campuses that don’t have standard schedules, particularly in student affairs, which complicates the discussion about overtime pay.
“There may be a given week where somebody who’s making $45,000 a year is routinely putting in 14-hour days because they’re doing programming for Welcome Week,” he said. “Traditionally, that’s not overtime that’s been paid … But it does highlight the fact that there are people who are working well in excess of 40-hour weeks at points in time, and they’re not compensated very well.”
He noted that some employees are comfortable with a schedule in which the workload ebbs and flows throughout the academic year. For those jobs, a salary offers consistent pay despite the varying workloads.
“But on the flip side, we have an attrition problem in higher ed, and we have an attrition problem of early professionals in student affairs roles,” he said. “And I think part of it is that the nature of those nontraditional schedules can really wear down on people.”
Too Far, Too Fast?
Opponents of the proposal say it goes too far, too fast. A 55 percent increase would be “pretty drastic, potentially detrimental, highly disruptive to our campuses—particularly if there’s no kind of transition period,” said Steven Bloom, assistant vice president for government relations at the American Council on Education, the chief lobbying group for higher education. (The current proposal doesn’t provide a transition period to phase in the changes if the rule becomes final.)
Implementing the 2016 rule would have cost 35 institutions nearly $115 million in one year, according to the College and University Professional Association for Human Resources (CUPA-HR), which opposed the rule.
Bloom added that ACE supports “reasonable” increases to the overtime threshold such as what the Trump administration carried out. “What we’ve said in the past and we’ll say again is we’re really focused on timing and method for implementing a higher threshold to avoid major disruptions to our campuses,” he said.
According to Bloom, employees who are currently exempt from overtime work varying hours that are difficult to track and the change could alter the nature of their jobs. A shift in overtime policy could also hinder flexible or remote work arrangements and reduce professional development opportunities, he said.
“If you have employees who are going to go from not getting overtime to getting overtime, institutions are going to be very mindful about how they use those employees and how many hours they work for these types of jobs,” Bloom said. “A lot of those jobs are difficult to do if you’re really worried about a 40-hour work week.”
The number of employees in higher ed who would be affected is not yet clear, but sources estimate that tens of thousands to hundreds of thousands could see their jobs reclassified as nonexempt. When the Trump administration raised the threshold to $35,568, about 5 percent of exempt employees’ jobs were affected, according to CUPA-HR.
The American Association of Community Colleges said in an online post last week that “thousands of community college employees would be affected by the proposed change.”
“Many community college campuses will therefore face stark personnel and financial decisions if the proposed overtime rule is finalized in a form anything close to what is proposed,” the post said.
As in the Obama proposal, the Biden administration is looking to automatically update the threshold every three years. The salary updates will be based on 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage census region. That census region is currently the South.
The automatic update worries Josh Ulman, a lobbyist for CUPA-HR. Tying the automatic updates to the 35th percentile of salaried workers will lead to an “exponential jump” in the cutoff, he said, by creating a “situation where the threshold is driving wage inflation rather than adjusting to the economic circumstances.”
Ulman added that the salary threshold doesn’t take into account other benefits, such as housing, that institutions provide to some employees.
“We’re mini cities,” he said. “We have a variety of different folks that work there. Higher ed has specialized in providing unique benefits and a wonderful place to work for folks in an effort to recruit talent that it generally wouldn’t otherwise be able to afford.”
Edward Conroy, a senior adviser at New America, a left-leaning think tank, said colleges and universities are in a difficult position as they grapple with declining enrollment, underfunding from state and federal governments, and other stressors. However, he said, there’s a mismatch in the skills and experience required in higher education and what people are paid.
“You can’t run world-class institutions without good people at the end of the day,” he said. “Nobody’s asking for everybody who works in higher ed to become millionaires; $55,000 is not crazy money by anybody’s standards.”