Dive Brief:
- The Obama administration's proposal to raise the salary threshold for exempt employees from $23,660 to $50,440, is causing major concern at colleges and universities where thousands of employees could be affected.
- Inside Higher Ed reports the Department of Labor is expected to give institutions just 60 days to comply with the change, either raising employees' salaries to get over the new threshold or pay them overtime for more than 40 hours of work per week.
- The College & University Professional Association for Human Resources has advocated a lower threshold that takes regional and sector differences into account when it comes to pay, as well as a longer implementation timeline for any approved change.
Dive Insight:
Colleges and universities are facing the prospect of a massive payroll disturbance with the change.
Possible responses include raising the salaries of lower-paid employees to get over the new threshold (and, perhaps, raising their superiors' salaries to maintain the hierarchy), requiring that lower-paid employees work no more than 40 hours per week (and facing compliance issues with those who ignore the new rule because of their desires or perceived pressures), and spending millions more on overtime pay. No word, of course, on when this major change could be handed down.
The Fair Labor Standards Act has protected employees making less than $23,660 without an update since 1975, when 62% of full-time salaried workers fell under that umbrella, according to Inside Higher Ed. Now just 8% of employees make less than that amount, protecting them from working more than 40 hours per week without compensation.