OVERTIME WAGE CHANGES

Higher Ed Executives Consulting Firm

The Department of Labor is undertaking rulemaking to revise regulations which govern the exemption of executive, administrative, and professional employees from the FLSA’s minimum wage and overtime pay requirements after Obama era regulations were struck down by a federal district court in 2016. Before the court blocked the rule, Institutions of Higher Education were poised to begin expanding overtime to their employees and despite being blocked, there were lots of lingering questions about which employees were eligible for overtime pay and which weren’t.

Under the Fair Labor Standards Act (FLSA) Higher Education employees such as faculty, administrators and other “white-collar” employees must meet unique requirements to be classified as exempt from federal overtime pay rules.

The FLSA requires that a non-exempt employee receive minimum wages for his or her work, as well as overtime wages whenever he or she works more than 40 hours in a workweek. Section 13(a)(1) of the FLSA, however, exempts certain employees who perform bona fide executive, administrative, professional, and outside sales duties from minimum wage and overtime requirements. These exemptions are often called the “white collar” exemptions.

To qualify for a white-collar exemption, an employee must generally satisfy three tests:

  1. The employee must be paid on a salary basis that is not subject to reduction based on the quality or quantity of work (the “salary basis test”), rather than, for example, on an hourly basis;
  2. The employee must receive a salary at a rate not less than $455* per week (the “salary level test”); and
  3. The employee’s primary duty must involve the kind of work associated with the exempt status sought, such as executive, administrative, or professional work (the “duties test”).

If you’re thinking this list is awfully broad, you’re not alone. It’s reasonable to assume based on this that these rules could apply to everyone from teachers and coaches to financial aid and admissions personnel. And let’s not forget student employees like graduate teaching assistants, research assistants, and student residential assistants, they’re covered here too.

Recently the U.S. Department of Labor Wage and Hour Division released Fact Sheet #17S: Higher Education Institutions and Overtime Pay Under the Fair Labor Standard Act. This fact sheet breaks it all down for you so that you can see which jobs are exempt and there are a few changes to note:

Exemptions for Common Higher Education Jobs

  • Teachers and Faculty including those who teach online or remotely
  • Coaches (excluding recruiters)
  • Professional Employees (Teachers and Learned Professionals)
  • Administrative Employees (Financial Aid, Admissions, Registrar etc.)
  • Executive Employees

Student Employees (Graduate Teaching Assistants, Research Assistants, Student Residential Assistants)