Welcome to the Employment Law section of our webpage. Employment law issues are complex, often subject to state and local law (not ordinarily covered on CLIC pages) as well as federal law. This front page will reflect our most current information on employment law affecting educational institutions.
Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees; Proposed Rule, 80 Fed. Reg. 38515, July 6, 2015.
Currently, employees who are paid over $455 per week ($24,660 per year) and who perform executive, administrative, professional, or computer professional type work are not required to receive overtime pay. The Department proposes to set the standard salary level equal to the 40th percentile of earnings for full-time salaried workers -$921 per week, or $47,892 annually for a full-year worker.
Certain highly compensated employees are exempt from the overtime pay requirement if they are paid total annual compensation of at least $100,000 (which must include at least $455 per week paid on a salary or fee basis) and if they customarily and regularly perform at least one of the exempt duties or responsibilities of an executive, administrative, or professional employee identified in the standard tests for exemption.The Department is also proposing to set the highly compensated employee annual compensation level equal to the 90th percentile of earnings for full-time salaried workers ($122,148 annually versus the current $100,000 per year).
Along with physicians, lawyers and professors, exempt employees also includes those engaged in academic administrative functions if they meet the salary level (now at least $455 weekly) and the salary basis test (predetermined fixed salary).The primary duty must be administrative functions directly related to academic instruction or training in an educational establishment, which must include exercising discretion and independent judgement with respect to matters of significance. "In general, the exercise of discretion and
independent judgment involves the comparison and the evaluation of possible courses of conduct, and acting or making a decision after the various possibilities have been considered.) (NACUA paper 2011)
An academic administrator would include department heads and academic counselors. Executive assistants may be exempt employees, if delegated genuine authority.
See 29 USC §541.204. Also exempt are educational administrators, meaning those who plan, direct, or coordinate research, instructional, student administration and services, and other educational activities at postsecondary institutions. Admissions counselor who exercise independent judgment in selecting students may also qualify.
Computer employees who write software code, design system architecture, or design databases are also exempt.
The proposed rule also proposes automatically adjusting the minimum salary requirements annually, either by using a fixed percentile of wages or the consumer price index. For more information see the Wage and Hour Division Fact Sheet.
CUPA HR Letter (dated September 4, 2015) submitted in comment on the July 6, 2015 proposed changes to the exemptions from overtime pay requirements for white collar employees.
FLSA Test on Independent Contractors: Administrator's Interpretation No. 2015-1, Issued July 15, 2015*
Possibly issued in connection with the rise of new business models, such as Uber, this is a DOL test for summarizes the position DOL's Wage and Hour division has taken in entering into agreements with states and the IRS on how to handle Employer misclassification. The heart of the DOL position is stated here, and focuses on more than control, which is the heart of the IRS /common law test. The end result is that a worker dependent for economic survival on the employer will be an employee, and a person in business for him or herself will be an independent contractor.
In order to make the determination whether a worker is an employee or an independent contractor under the FLSA, courts use the multi-factorial “economic realities” test, which focuses on whether the worker is economically dependent on the employer or in business for him or herself. A worker who is economically dependent on an employer is suffered or permitted to work by the employer. Thus, applying the economic realities test in view of the expansive definition of “employ” under the Act, most workers are employees under the FLSA. The application of the economic realities factors must be consistent with the broad “suffer or permit to work” standard of the FLSA.
Northwestern University and College Athletic Players Association (CAPA), Petitioner, Case 13-RC-121359 (August 17, 2015) (Decision by NLRB, upon review and order)
In March 2014, a Regional Director held the grant in aid scholarship football players at Northwestern were employees within Section 2(3) of the NLRA. Northwestern appealed, and the NLRB reversed, holding that the Board would decline jurisdiction as involvement in this case would not improve stability in labor relations. The NLRB noted Northwestern is a private school, while the rest of the Big Ten are public, and emphasized this was a unique case
See Glatt et al v. Fox Searchlight Pictures, et al. (C.A. 2nd Cir.) July 2, 2015. Interns who were unpaid and who were asked to perform a number of tasks unrelated to an educational purpose sued over the lack of pay. The court declined to grant deference to the DOL Fact Sheet 71, noting as follows:
We decline DOL’s invitation to defer to the test laid out in the Intern Fact Sheet. As DOL makes clear in its brief, its six part test is essentially a distillation of the facts discussed in Portland Terminal. DOL Br. at 11, 12, 21.
Unlike an agency’s interpretation of ambiguous statutory terms or its own regulations, “an agency has no special competence or role in interpreting a judicial decision."
State of N.Y. v. Shalala, 119 F.3d 175, 180 (2d Cir. 1997).