Press "Enter" to skip to content

Labor proposal to raise wage floor rankles higher education

The Department of Labor usually engages in some pretty mundane stuff. Various divisions engage employment data collection, labor law enforcement, worker safety and other similar concerns. One of the Biden Administration’s labor priorities has caught the attention of a collection of higher education interest groups.

Last fall, the Department of Labor announced its intention to update overtime regulations. Specifically, it said:

“[Wage and Hour Division] will propose updates to the overtime regulations to ensure that middle class jobs pay middle class wages, extending important overtime pay protections to millions of workers and raising their pay.”

So, what does that mean? The Fair Labor Standards Act classifies positions as either exempt or non-exempt from overtime pay. Workers in a non-exempt position can collect overtime when they work more than 8 hours in a day or 40 hours in a week. Non-exempt employees are typically paid an hourly wage. Exempt employees are typically salaried employees. No matter how many (or few) hours they work per week, they’re paid a fixed amount.

In the past, WHD updates to overtime regulations resulted in converting positions that were previously exempt from overtime to non-exempt positions. The WHD would assess the salary parameters for exempt positions in a variety of sectors and set a new minimum wage floor for them. Workers in the affected positions whose average weekly salary fell below the new minimum wage floor were likely to be reclassified as hourly workers. This reclassification meant that those newly reclassified workers became eligible for overtime.

Lowest-paid higher education workers will cost more

Unions typically represent teachers and certain other work groups. This could include custodial workers, facilities personnel, secretaries, public safety personnel, and tradespeople. The WHD rules in development would not impact those workers. These workers are typically already hourly workers, so they can already collect overtime.

The proposed WHD rules will affect the lowest-paid salaried workers. The last time the DOL reclassified workers, the reclassification included executive, administrative, professional, outside sales and IT workers.

The DOL last reclassified certain positions as non-exempt during the Obama Administration. When the WHD undertakes this action, the biggest complainers are higher education institutions, or higher education special interest groups and their lobbyists.

This time around, the higher education lobbyists are already lining up to whine about the possibility of having to pay the lowest-paid workers a few thousand dollars more each year in base salary.

AND overtime.

Now, keep in mind that the average university/college president pulls in $311,000 per year. (The highest paid university president currently nets more than $7M per year.) In 2022, the average college/university vice president will bring home $217,500. These figures only represent salary; they do not reflect the copious benefits that go along with these positions.

Higher education institutions think nothing of engaging in a compensation arms race when it comes to their highest paid employees. The sky is the limit when it comes to executive compensation. Administrative costs increased by more than 941% between 1980 and 2014. During the same time, instructional costs increased 715%.

Cost of lowest-paid employees isn’t the problem

The same executives who complain about the cost of IT employees think nothing of hiring 13 Vice Presidents. The real problem here is not how much the lowest paid higher education employees make. Instead, it is the no-limits approach to executive compensation and unrestrained hiring in the C-suite (combined with their penchant for costly “initiatives” and campus construction projects) that have grossly inflated the cost of higher education. It’s the executives who direct their lobbyists to complain about WHD’s efforts to keep salaried employees out of poverty.

When it comes time to reclassify the lowest-paid employees, WCC should offset the resulting cost increases by paring back the executive org chart.

Photo Credit: mark6mauno, via Flickr