New Overtime Rules

Overtime Rules and the Technology Department

New overtime rules were released by the Department of Labor this month. ATLIS is sending you our take on what the new rules about overtime mean for those who work in independent school technology. We are providing this information for educational purposes only. Remember that your state and local laws may differ from the federal rules, and your human resource officer should contact your school's legal counsel to ensure that your school is in compliance with all applicable laws.

You can see the entire scope of the new rules on the Department of Labor’s website. Of particular interest is special guidance the department has provided non­profits and higher education institutions. When combined with the overall rules, these two documents cover most of the questions that might arise in an independent school.

Who does not get overtime?

  • Anyone with a job description that previously met the criteria for exemption from overtime (called the “duties test” see below) is still exempt if that individual's salary exceeds $913/week (or $47,476 per year for a full­ year worker). The employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the duties test. In most schools, this would include a technology director and may include other individuals. It is the work itself, not the job title, that determines exemption.
  • All “highly compensated workers” (salary over $134,004) are exempt. Teachers remain exempt, regardless of salary.

Who does get overtime?

  • Anyone making less than $913/week (or $47,476 per year for a full­ year worker) even if his/her job description meets the “duties test” for exemption. This salary threshold will automatically increase every 3 years (not every year) to maintain a salary level that is at the 40th percentile of full­ time salaried workers in the lowest­ wage Census region. The next increase is scheduled for January 1, 2020.
  • Anyone previously entitled to overtime based on the duties test remains eligible for overtime compensation as the criteria has not changed. Help Desk Managers, System Support Specialists, Database Administrators, Network Administrators, etc. typically fall into this category, regardless of salary unless they earn more than $134,004.

What is less clear:

The requirements for overtime for a technology integrationist (or those holding similar positions) making less than $47,476 per year are not clear cut. While most schools consider this a faculty position, to be considered a teacher, the primary daily activity of this employee must be active instruction of students.
However, the rules for higher education also allow for exempt status for those who meet the criteria for "Academic Administrative Personnel": The administrative personnel that help run higher education institutions and interact with students outside the classroom, such as department heads, academic counselors and advisors, intervention specialists and others with similar responsibilities are subject to a special salary threshold that does not apply to white­collar employees outside of higher education. These employees are not entitled to overtime compensation if they are paid at least as much as the entrance salary for teachers at their institution (Overtime Final Rule and Higher Education).

What technology leaders should do now:

  • Schedule a meeting with your human resources director (who is certainly aware of the changes) to discuss next steps. Schools with budget years ending on June 30 will need to develop new budgets for the fiscal year because the new rules go into effect December 1, 2016. Do not plan to wait until July 1, 2017!  
  • Discuss the status of any employees currently making less than $913/week (or $47,476 per year for a full­year worker) with your human resources director. Clarify whether those positions fall into the role of academic administrative personnel.
  • Review the criteria for overtime for all employees currently classified as exempt. Be certain that the roles you classify as exempt meet all the criteria.
  • Plan to review the criteria when new hires are made, job descriptions are revised, or new threshold salaries are released by the department of labor.

Duties Test These guidelines are unchanged, but may be helpful for technology leaders to review.

Executive: an executive exempt employee has the authority to hire, fire, promote, set policy, and supervises two or more full­ time employees (or four or more half ­time employees, or at least one full­ time and two half ­time employees) in managing an enterprise or subdivision of the enterprise ­ examples given in the regulations include the president of a company or the head of a major division of an enterprise ­ also, a department head with hiring and firing authority can qualify ­ if the employee has no actual hiring or firing authority, but is highly influential in such decisions, the executive exemption can still apply.
Administrative: performs specialized or technical office or non­manual work related to management policies or general business operations of an enterprise ­ the decisions such an employee makes are of substantial importance to the company as a whole ­ their work supports the organization, not individual customers ­ has a great deal of discretion and independent judgment in day-to­-day duties ­ typical examples include personnel director, vice president of operations, head buyer, head dispatcher, or department head.
Professional: performs original and creative work or work requiring advanced knowledge normally acquired through a prolonged course of specialized academic study? a professional exempt employee's work cannot be standardized with respect to time ­ typical examples are physician, attorney, CPA, engineer, architect, scientist (geologist, botanist, physicist, zoologist, chemist, etc.), registered nurse, and teacher at any educational institution.

NAIS held a webinar reviewing the rules on May 26, 2016.
NBOA posted about the new rules as soon as they were released.

Questions or comments? Please contact Sarah Hanawald, Executive Director of ATLIS. 

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