Federal overtime changes will affect universities

This week, the White House announced new federal regulations concerning pay for most classes of workers who make up to $47,476 per year. Specifically, it increases the salary threshold for overtime pay–if you are salaried and make up to $913 per week, you need to receive overtime pay if you work more than 40 hours per week. National Institutes of Health director Francis Collins and Thomas Perez, the U.S. Secretary of Labor, co-authored an article stating explicitly that this applies to postdoctoral fellows, and Mike Lauer, deputy director of extramural affairs at NIH, weighed in as well.  Businesses have six months, until December 1, to comply with the new rules, and it looks as though universities will need that much time to figure out what to do. The new rules pose challenges for many areas of academia: for example, they don’t apply to adjunct instructors (thus potentially creating even more inequity in the system), though they do apply to admissions officers, athletic trainers, and so on.

The Department of Labor gives a number of options for compliance besides paying overtime: for example, salaries could be raised to surpass the threshold, comp time could be offered, or base pay could be reduced. But researchers paid off grants have more to consider: the NIH modular budget has been the same since 2000 (when the Year 0 postdoc salary was about $27,000), and new requirements for reproducibility of research and scientific rigor may put additional pressure on already tight grant budgets.

We will update you with more information as this story unfolds.

 

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Comments

  1. Until a system to keep track of postdoc researchers time is implemented, I don’t see how this will work. Right now leave time for postdocs is tracked 2 ways; 1) honor system, or 2) manually by division admins. I trust OHSU is working on a plan for this section of worker.

  2. You state that “The Department of Labor gives a number of options for compliance besides paying overtime: for example, salaries could be raised to surpass the threshold, comp time could be offered, or base pay could be reduced”. Can you provide references to the idea that pay could be reduced? I have only found the following options to comply with the new rules & regulations: (1) Raise salary and keep the employee exempt from overtime; (2) Pay overtime in addition to the employee’s current salary when necessary; or (3) Evaluate and realign hours and staff workload.

    Thanks.

  3. Elyse, specifically the rule says that employers could “reduce the amount of pay allocated to base salary (provided that the employee still earns at least the applicable hourly minimum wage) and add pay to account for overtime for hours worked over 40 in the workweek, to hold total weekly pay constant.” The full guidance is here: https://www.dol.gov/WHD/overtime/final2016/faq.htm See Question 9.

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