According to a survey of NAICU members concerning the Department of Labor’s (DOL) proposed rule increasing the threshold to be considered exempt from overtime pay to $55,068, 95% are concerned about the planned changes, including 75% who are “very concerned.”

The survey findings also show that NAICU members expect to experience significant hardships in implementing the proposed changes and anticipate the new rules having a negative impact on their campuses.

Additional findings

• 84% are expecting a significant increase in operating costs, including:
  • 19% anticipating an annual increase between $250,000 and $500,000;
  • 17% anticipating an annual increase between $500,001-$750,000;
  • 16% anticipating an annual increase over $1 million; and
  • Just 6% anticipate no increase to their operating costs.
• 38% expect to lay off employees, although another 38% weren’t sure about layoffs at the time of the survey.
• 64% will need to reclassify campus positions.
• 67% are “very concerned” about the resulting employee morale associated with job reclassifications; 99% express some level of concern about employee morale.
• Employees most affected by the proposal include those who work in athletics, student life, admissions, and development.

Over 250 member campuses responded to the survey, which closed on October 4.

In addition to increasing the overtime threshold from $35,568 to $55,068, the proposal includes automatic increases every three years based on a formula that considers the 35^th percentile of only salaried workers from the South. The proposal maintained the current teaching exemption, so employees who provide instruction and have not been subject to the overtime threshold rules, would continue to be exempt.

DOL is accepting public comments on the proposal until November 7. NAICU joined the Partnership to Protect Workplace Opportunity (PPWO) and 105 other employer groups in sending a letter to DOL requesting an additional 60 days to comment so employers would have enough time to conduct complicated cost analyses and develop implementation plans. However, the agency announced this week that it will not extend the deadline beyond November 7.

NAICU members who are concerned about the effects this proposal will have on their campuses are encouraged to submit comments. Institutions that submit comments are also encouraged to share them with NAICU’s Director of Tax Policy, Karin Johns at karin@naicu.edu. It’s currently unclear when a final rule will be announced.