A rule just released by the Department of Labor (DOL) may have an important effect on the jobs of postdocs. The new rule arises from a proposal that President Obama announced last summer to extend overtime protection to millions of Americans. The president directed the DOL to make a change to the regulations that govern the exemptions to the Fair Labor Standards Act overtime pay requirements. The president’s proposal would have raised the salary threshold for exemption from overtime pay from $23,660 to $50,440. The threshold in the final version of the new rule is $47,476. That means that white-collar workers making less than $47,476 will be guaranteed overtime pay if they put in more than 40 hours a week. What does this mean for you? Well, if you’re a postdoc, it could mean a higher salary. Or it could mean that there will be fewer postdoc spots and you will have a harder time finding or keeping a position.
Current National Institutes of Health (NIH) guidelines for postdoc stipends are set at $42,840. For universities and other research institutions to comply with the new regulation, they will have to either bump up the salaries for postdocs to meet the new threshold or reclassify postdocs from exempt professional employees to hourly employees. This could cost universities millions of dollars. For example, Vanderbilt University calculated that nearly half its employees would be eligible for overtime pay, up from about a third now. It would cost about $7 million a year to increase salaries of the newly eligible workers to keep them exempt from the rule—or more than $9 million to switch them to hourly employees logging 10 hours of overtime weekly.1 Not unsurprisingly, many universities, medical colleges, and research institutions submitted comments urging a more thoughtful approach to the implementation of this rule.
The National Postdoctoral Association, in its comments to the DOL, supported the increase in postdoc salaries. However, recognizing the financial challenge and complexity for universities to comply with the rule, it joined with universities in encouraging a gradual increase in the threshold. In an Op-Ed in the Huffington Post by NIH Director Francis Collins and U.S. Secretary of Labor Thomas Perez, Collins stated that he is fully supportive of the increased salary threshold for postdocs and will increase postdocs’ National Research Service Award stipends to levels at or above the new threshold.
The rule reached its final stages of review in April when the DOL sent it to the White House’s Office of Management and Budget. The final rule was released on May 17 and goes into effect on December 1, 2016.
1Trottman M (March 22, 2016). Colleges brace for overtime overhaul. Wall Street Journal. http://on.wsj.com/1o4LvuF.