NAICU Washington Update

New Overtime Rule Proposed by Labor Department

March 22, 2019

The threshold for overtime pay would increase from $455 to $679 per week ($35,308 annually) under a new Notice of Proposed Rulemaking (NPRM) published March 22 by the U.S. Department of Labor (DOL).  The DOL projects this adjustment will make more than one million additional U.S. workers eligible for overtime pay.
Under current law, employees with a salary below $455 per week ($23,660 annually) must be paid overtime if they work more than 40 hours per week. This salary level was set in 2004 and has not been adjusted since.
This new NPRM follows the last attempt to increase the overtime threshold during the Obama Administration.  In 2016, a final rule was nearly implemented that would have more than doubled the threshold amount from $23,660 to $47,476 and would have hit small businesses, nonprofits, and many colleges and universities particularly hard.  That rule was never implemented as the Obama Administration transitioned to the Trump Administration.
DOL is asking for public comment on the NPRM prior to issuing a final rule.  In addition to holding several listening sessions around the country last fall, DOL also received over 200,000 public comments before issuing the NPRM.  NAICU joined community comments submitted last year by the College and University Professional Association for Human Resources (CUPA-HR).
NAICU will remain engaged in the current comment process as part of a higher education community-wide comment process.  CUPA-HR has also provided additional details on the proposed rule. The community comments will likely support increasing the overtime threshold but will ask for considerations for college and university employees that work varied schedules, by prorating the salary threshold for part-time employees.  In addition, the community also will likely suggest allowing the cost of employer-provided room and board to count toward the salary threshold.
While the NPRM does not include an automatic annual adjustment, the higher education community will likely suggest a process going forward that will be more consistent and easy to plan for, such as five to seven year intervals for rulemaking on further overtime adjustments.  This would put the overtime adjustment process back in sync with how DOL used to regulate prior to the 1970’s.
If any institution wants to submit comments separately, instructions can be found in the Notice of Proposed Rulemaking.  Comment must be submitted by May 21, 2019.