November 30, 2016
Topic: Human Resources
(Editor's note: This story was updated Dec. 7 with additional information about U-M's actions related to this issue.)
With the legal outcome of new federal regulations governing overtime eligibility currently in question, the University of Michigan will pause implementation of related changes that had been scheduled to take effect Dec. 1.
On Nov. 22, a U.S. District Court judge in Texas issued a nationwide injunction to postpone the implementation of changes to overtime eligibility under the Fair Labor Standards Act. The changes would have raised the salary threshold for an individual to be considered a salaried — or exempt — employee to $47,476.
Exempt employees do not qualify for overtime pay, while non-exempt employees do. About 2,400 faculty and staff at U-M would be affected by the changes.
To comply with the regulations, units either had planned to raise salaries to the new threshold to maintain FLSA exempt status, or re-classify individuals under the threshold to FLSA non-exempt, making them eligible for overtime.
At this time, the university will continue to pause implementation of changes to employee FLSA status. Individuals who initially were transitioned to FLSA non-exempt status under the anticipated new regulations were returned to exempt status as of Dec. 1 and will remain so until the situation is resolved.
The university will not mandate institutionwide salary increases that would have been required under the revised regulation.
The National Institutes of Health has announced it is proceeding with its planned increase in postdoctoral stipends. Many university units use that benchmark as guidance for postdoc pay.
During the analysis that the university conducted as part of this process for all staff, units identified issues related to equity or competitive pay for some individuals. As always, units have the flexibility to address those situations. Units will communicate with affected individuals through their University Human Resources contacts.