FOR IMMEDIATE RELEASE
May 18, 2016
Content Manager – Communications and Marketing
CUPA-HR Expresses Disappointment Over DOL Overtime Rule
DOL Failed to Respond to Concerns Expressed by Higher Education; Impact on Institutions, Higher Ed Employees and Students Will Be Severe
The College and University Professional Association for Human Resources (CUPA-HR) issued the following statement in response to the final rule released today by the U.S. Department of Labor changing the exemptions to the federal overtime pay requirements for executive, professional and administrative employees.
“We are deeply disappointed that the Labor Department did not do more to address the concerns of colleges and universities across the country that submitted comments, wrote letters to Congress and met with the administration officials” said CUPA-HR Chief Executive Officer Andy Brantley. “The final rule presents tremendous issues for colleges and universities, which would face annual cost increases in the millions and be forced to make difficult decisions for the 3.9 million higher education workers nationwide and the students they serve.”
Based on data the association has collected from members in the last few days and over the last year, the increase will result in significant costs — the combined cost estimates of the 35 institutions that provided data is nearly $115 million — to institutions and would inevitably trigger tuition hikes and reductions in force and services. The rule could negatively impact virtually every facet of academic life, from research to student services and athletics at community colleges, larger public universities, small liberal arts colleges, faith-based institutions and large research institutions.
In a recent survey of CUPA-HR members, 87 percent of respondents indicated that as a result of the rule they would have to reclassify any exempt employee making less than $47,500. “This will directly impact employees who could lose much of the flexibility and opportunity that is innate to salaried status,” said Brantley.
Last summer, CUPA-HR conducted a survey of 819 members as part of the comments submitted by 18 higher ed organizations in response to DOL’s proposal. In this survey, 88 percent of respondents indicated any threshold over $40,352 would be too high. More recently, CUPA-HR’s 2016 Professionals in Higher Education Salary Survey Report shows that a threshold of $47,000, which is slightly below the final rule’s $47,476, would impose significant costs on the higher education system. According to the report, institutions would face an average cost of $209,169 if they had to adjust just one employee for each of the 24 professional positions reporting a median salary below that level. Institutions will typically have many professionals in these slots below the threshold, particularly institutions in lower-cost areas of the county, which will be those hardest hit by the rule.
CUPA-HR has been following this rulemaking since March 2014 when President Obama issued a memorandum directing the Secretary of Labor to update the exemptions. In July 2015, DOL proposed increasing the threshold to $50,440 with automatic updates on an annualized basis. “Through each and every stage of the rulemaking process, CUPA-HR and its members have been the voice of higher education advocating for positive changes that would lessen the negative impact of the many unintended consequences associated with the proposed rule,” said Brantley.
CUPA-HR supports the Protecting Workplace Advancement and Opportunity Act introduced in the Senate and House by Sen. Tim Scott (R-S.C.) and Rep. Tim Walberg (R-Mich.) and cosponsored by Sen. Lamar Alexander (R-Tenn.) and Rep. John Kline (R-Minn.). The bill would require the Labor Department to conduct a new and comprehensive economic analysis on the impact of mandatory overtime expansion to small businesses, nonprofits and public employers as well as an analysis on the effect on employee flexibility before implementing a change to the exemptions.
“We agree with these members of Congress and the Obama Administration’s own Small Business Administration that the Labor Department needs to comprehensively examine the economic impact of a change to the overtime laws before imposing this rule on colleges and universities and other employers,” said Brantley.
CUPA-HR helps lead the Partnership to Protect Workplace Opportunity (PPWO). For more information about the partnership, visit www.protectingopportunity.org.
The College and University Professional Association for Human Resources serves as the voice of human resources in higher education, representing more than 20,000 human resources professionals and other campus leaders at over 1,900 colleges and universities across the country, including 91 percent of all United States doctoral institutions, 77 percent of all master’s institutions, 57 percent of all bachelor’s institutions and 600 two-year and specialized institutions. For more information about CUPA-HR, visit www.cupahr.org.
CUPA-HR will continue to advocate for a more appropriate salary threshold — one that will not harm institutions of higher education, their employees and the students they serve — and we urge members of Congress to support the Protecting Workplace Advancement and Opportunity Act.