The much anticipated final overtime exemption rules for white collar workers under the Fair Labor Standards Act 
(FLSA) has finally been issued by the Department of Labor (DOL) on May 18, 2016. Additionally, more detailed guidance for institutions of higher education was published by the DOL seeking to stay in compliance with the latest obligations. The adjustment of compensation mandated by the new rules needs considerable effort to balance university and college budgetary restrictions, legal compliance obligations and workforce morale concerns in the coming few months.
It is estimated by the DOL that the new rule will bring in 35% approximately of the entire present salaried, full-time workers being qualified for overtime, based on their salary level alone. While at the same time, raising too many positions’ salaries to reach the latest $47,476 limit generates considerable issues with salary compression on campus for positions that already above the threshold. In order to resolve such concerns and to limit the need to comply with future increases of the FLSA salary limit, many higher educational institutions will probably look to change positions to non-exempt status; however, they will be required to deal with employee-morale issues at the same time, which are related to such change and manage the methods of compensating or the number of hours for overtime whenever possible for budgetary reasons.
Duties and Salaries
It is crucial to make sure that for every position considered under the new regulations, the salary assigned and the duties that are performed both are in compliance with the exemption rules. The institutions would need to review how to structure compensation for every positions that are paid low salaries than $47,476 at present and identify how to distinguish or reorganize every positions in the months to come. However, it is crucial to remember about positions earning salaries above the threshold as whether the responsibilities of those positions are in compliance with the exemption requirements, which may probably be subject to increased scrutiny.
Positions that might be affected –
Here are some of the highlights from the guidance –
Coaches and Teachers: The latest salary threshold will not affect the positions for which teaching is the main duty because, under FLSA, there is no minimum salary for exempt teaching professionals.
Administrative people (Academic): The positions where the main duties are of administrative work that is directly related to academic training or instruction can stay exempt with pay less than the new limit as long as attendant salary exceeds or equals the entrance salary for teachers at the specific institution.
Professionals (Learned): besides employees practicing medicine or law, the fresh salary limit will be enforced to positions with primary responsibilities, which will qualify as “learned professionals” otherwise. Some of the particular positions mentioned in the guidance that will require to get paid more than $47,676 to stay exempt include certified athletic trainers, researchers, psychologists, librarians and certified public accounts.
To get detailed insight, join this live webinar by expert speaker Erin E. Dolly who will discuss creating an institutional action plan for evaluating institution’s current practices and transitioning to the requirements of the final FLSA overtime rules.
