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Biden Administration proposes changes to overtime rules

A proposed change to the federal threshold for overtime eligibility is raising warnings in higher education. The Biden Administration has proposed raising the upper salary limit for overtime eligibility from $35,568 per year ($17.10/hour) to $55,068 ($26.48/hour). The Department of Labor has suggested increasing the limit even higher to $60,209 ($28.95/hr). Workers who make less than the threshold amount would become eligible to collect overtime when they exceed 8 hours of work per day or 40 hours of work per week.

Of course, higher education institutions are opposed to this. They have trotted out the threat that if they have to pay their workforce more, that money will come from cuts to courses and programs. This is a common defense, every time a higher education institution needs to come up with some money. Apparently, the only place administrators feel comfortable making cuts is the instruction budget .

I don’t understand American employers’ fascination with low-wage labor. But clearly, there are no other places to cut the budget. We’re talking an added expense of between $2M and $6M per year, depending upon the size of the community college. In WCC’s case, if we assumed the median increase of $4M, the college would have to increase full-time equivalent enrollment by about 1,350 students each year.

Overtime for lowest paid employees is affordable without instructional cuts

There are other places to find money. WCC could reduce its utility costs by increasing the efficiency of the building-wide HVAC systems. Until very recently, WCC made no effort to reduce energy costs. That earned it the top spot among all Michigan community colleges for energy expenditures.

WCC could trim its executive budget. The school currently has about 11 vice presidents, including some duplicates. Or it could use the $7M in increased property tax revenues Washtenaw County residents paid this year to increase the wages of its lowest-paid workers. By itself, that would fully cover the cost of overtime for newly eligible employees.

WCC could also start charging out-of-district online students the out of district rate. Not only would this relieve the taxpayers of Washtenaw County of the burden of subsidizing out-of-district students, but also it would raise revenues. In fact, if WCC restored the tuition rate for distance learning classes to out-of-district and out-of -state students, that alone could potentially cover the cost of overtime to its lowest-paid employees.

Put another way, WCC is able to offer discounted tuition to out-of-district and out-of-state students on the backs of its lowest-paid employees. The administration can balance the deficit this generosity creates by shorting its low wage workers. And they do this with the full blessings of the Trustees who were elected to provide oversight over Washtenaw County tax dollars.

Isn’t that nice of the administration and the Board of Trustees?

So, when you hear WCC complaining about how much it will cost to make overtime benefits available to its lowest-paid staff, no cuts to the staff or instructional programs will be necessary. Rather, it requires only the will of the Administration to do the right thing.

Photo Credit: Mike McCune , via Flickr