What’s New
Ohio State University announced that it will roll back more than $2 million in raises for hundreds of employees that had been set to take effect on January 1. The raises had been granted to compensate for pending changes to the federal overtime rule, which was supposed to make more workers around the country eligible for overtime pay. But the changes were struck down last month by a federal judge.
The Details
Until earlier this year, federal law mandated that any employee who made around $35,000 or less per year must be paid overtime if they worked more than 40 hours a week. The Biden administration released a new rule this past spring raising the overtime threshold to about $58,000 by the beginning of 2025, a 66-percent increase over the current threshold, with provisions for further increases every three years.
The overtime-rule change affects the many college employees who earn modest salaries but work long hours, especially due to travel, such as admissions counselors and recruiting coaches. (The rule includes an exemption for teachers, so instructors and coaches who work primarily with active players don’t count.) College administrators were faced with the choice of raising the salaries of employees newly eligible for overtime to bring them up to the new exemption threshold, especially if their salaries were already close to the figure, or begin the process of getting them to keep track of their hours — a prospect tangled in red tape and added costs.
Ohio State raised the pay of 306 employees to bring them up to the overtime threshold before the first of the year, and those employees received their new pay rate for parts of November and December, according to a statement provided by the university. But a federal judge ruled last month that the Department of Labor overreached with the new rule. Because of that, the affected Ohio State employees “will revert to their original salary in January,” the statement from the university read. “We value our more than 50,000 employees and appreciate their contributions to the university and its mission. All employees remain eligible for annual merit increases, salary adjustments based on market rate, and promotion.”
What to Watch For
In interviews, college administrators always say with palpable sincerity that they want their employees to be paid fairly. But the federal overtime rule presents numerous challenges for them, including increased personnel costs at a time when many institutions are doing their utmost to hold costs down. Ohio State isn’t the only institution that raised some salaries to avoid the additional hassle and costs of administering overtime pay for employees who might regularly work far more than 40 hours a week. Will other colleges roll back those pay increases? Raising the overtime threshold may be dead for now, but the issue will surely return.
