Last week, the U.S. Department of Labor (DOL) announced plans to update the salary threshold to qualify for “white collar” exemptions under the Fair Labor Standard Act's overtime pay requirements. The move follows a similarly ambitious move by the Obama administration in 2016.
CUPA-HR’s government relations team, in cooperation with AACRAO, ACE, NACUA, NACUBO and NASPA, will host a webinar later this month to break down the proposed changes and discuss potential impacts for college campuses. Join us for the discussion on September 21 at 12:00 pm ET.
Final Overtime Rule
The Biden administration on Wednesday released its final rule to raise the overtime cutoff for most salaried employees from its current level of $35,568 annually to $55,068—a nearly 55 percent increase.
Julie Su, the department’s acting secretary, said in a statement that the rule “would help restore workers’ economic security by giving millions more salaried workers the right to overtime protections.”
Back in 2016, the Obama administration sought to double the salary threshold for the white-collar overtime exemption for executive, administrative, and professional (EAP) workers from $23,660 to $47,476 annually. However, a federal judge stayed and then ultimately overturned that rule shortly before it was set to take effect. The Trump administration subsequently issued a new rule in 2019, effective January 1, 2020, raising the salary cap on eligible workers to its current level.
The new Biden administration proposal does not make any changes to the duties requirements. However, the regulatory updates include a provision to automatically adjust the overtime limit every three years to keep pace with rising earnings.
The administration first signaled its renewed interest in updating the salary level requirement in the fall of 2021, amid calls from a number of lawmakers and labor advocates to increase the threshold by well over 100 percent to at least $82,732 by 2026.
Ahead of the final rule, AACRAO and other higher education associations expressed concerns with the timing of the rulemaking and encouraged the DOL to hold stakeholder meetings prior to releasing the anticipated overtime Notice of Proposed Rulemaking (NPRM). The letter highlights the higher education community's involvement with the prior rulemaking processes, outlines concerns regarding previous proposals to drastically increase the salary threshold, and discusses the impact of pandemic-related workforce changes across higher education.
The proposed final rule will be published in the Federal Register this week, initiating a 60 day public comment period. AACRAO intends to review the latest proposal and submit feedback, along with the broader higher education community.