Final Rule of the Fair Labor Standards Act in Higher Education
What does the Final Rule of the Fair Labor Standards Act mean for Higher Ed Professionals?
On May 23, 2016, the Department of Labor issued its Final Rule on the Fair Labor Standards Act (FLSA). The new guidance made sweeping changes to compensation and overtime limits for both hourly and salaried employees, and specific clarifications were added for Higher Education that could impact you and your staff.
The new rules go into effect December 1st, 2016; at that point, the new salary threshold for paid overtime for full-time, salaried employees will be increased to $47,476 from today’s level of $23,660.
Teachers “who earn the majority of their income lecturing or instructing” are exempt from these rule changes. Our understanding is that this means professional and adjunct faculty will not be impacted. This includes graduate students whose primary job duties include teaching or servicing as a teaching assistant.
The Department of Labor appears to view any graduate or undergraduate student engaged in research under faculty supervision while earning a degree to be in an educational relationship, not an employment relationship with the school or grantor. This means that these employees may not be entitled to overtime pay. Any student who is involved in a bona fide educational program and who serves as resident advisor or other similar capacity and receives reduced room and board fees or tuition credits are also not considered to be in an employment relationship with the educational institution.
The Department of Labor appears to suggest that employees such as department heads, academic counselors and advisors, intervention specialists, and others are not entitled to overtime compensation if they are paid at least as much as the entrance salary for teachers at their institution.
With all of these changes and clarifications, the Department of Labor does have several possible suggestions for institutions of Higher Education. The Department does clearly state that they will not dictate what option higher education employers use to comply with these and other regulations. Possible options for resolution include:
Raising salaries for eligible workers to meet the new threshold
Limiting the need for employee overtime by adjusting workloads and/or ensuring staffing levels best match with the anticipated workload.
Continuing to pay eligible employees a salary, plus overtime for hours in excess of 40 hours per week. The Department of Labor does not appear to require that overtime-eligible workers be paid hourly. They claim this option is effective for employees who usually work 40 hours or less, but have seasonal “spikes” when overtime hours are required.
For fixed schedule employees, employers are encourages to keep a record of any instances when workers work more than their regular hours.
For employees with flexible schedules, employers are not required to log sign in and out times. Instead, the Department suggests that employers keep an accurate record of the number of daily hours worked by the employee during each pay period.
Public higher education institutions can utilize comp time. These employers can provide comp time at time and one-half instead of cash overtime payments, where appropriate circumstances.
Some employees work a small amount of predictable overtime. Higher education employers can adjust employees’ base pay and pay overtime according to these predictable work schedules and the new guidance.
Symplicity is aware that these are complex rules and changes. We are here to provide information and support our clients wherever we can. Through our partnership with the Association of College and University Housing Officers (ACUHO), we are happy to present the following resources:
A full impact analysis paper.
A guide for evaluating position eligibility under new FLSA guidelines.
A robust FLSA Resource Center from noted law firm Sheyfarth Shaw.
As always, Symplicity is always interested in helping our customers, their faculty, their staff and their students succeed. If there is a way for our systems to help your institution solve problems, we are always interested in learning more!