Colleges nationwide are bracing for a new overtime rule that takes effect beginning on July 1. The Department of Labor’s final rule will significantly impact institutions, and to help them prepare, ACE’s Peter McDonough and Steven Bloom have written an issue brief outlining the key changes.
Under the previous overtime regulations, with limited exceptions, campus employees were not eligible for overtime pay under the federal Fair Labor Standards Act if their salary was at least $35,568 and they met the criteria for the “white-collar” exemptions. The new rule increases this salary threshold to $58,656, a rise of nearly 65 percent. This change will be implemented in phases: first, the threshold will increase to $43,888 by July 1, and then to $58,656 on Jan. 1, 2025.
The rule also provides for automatic updates to the minimum salary requirement every three years.
As ACE President Ted Mitchell said in a statement last month, the rule is going to cause considerable problems for institutions around the country, the vast majority of which are nonprofits and public entities unable to absorb sudden and massive increases in labor costs.
This issue brief explains the rule’s impact on campuses, offers compliance strategies, and answers pressing questions for presidents and senior leadership. It’s important to note that the brief serves as general guidance and doesn’t constitute legal advice.