Postdoc Overtime: The New Rule
Fall 2016 | Greer Arthur
As of December 1st 2016, any postdoctoral researcher employed in the United States, earning less than $47,476 and working more than 40 hours per week will be entitled to overtime pay.
But what are the specifics of this new rule, and what are the potential consequences of raised postdoc wages on both the scholars themselves and the research industry?
On May 18th 2016, the United States Department of Labor made a momentous change to the lives of more than 4 million workers by raising the salary threshold for overtime pay. The new Fair Labor Standards Act (FLSA), nicknamed the “Overtime Rule”, is due to be implemented on December 1st 2016 nationwide, and is intended to provide clearer and improved protection for workers already entitled to overtime pay. One of the more conspicuous groups to be affected are postdoctoral researchers, whose atypical working pattern often makes calculations and compensation of overtime extremely difficult. So what are the specifics of the new rule, and how will the change impact postdocs?
As a government-decreed legislation, the FLSA controls overtime pay by dictating that all United States’ workers be paid 1.5 times the standard hourly wage for overtime work. Overtime is qualified as a week comprising more than 40 hours of work, a duration which is often noticeably surpassed by postdoctoral researchers. Seen as a workers in training rather than typical employees with regular shift patterns, postdocs often succumb to the demands heavy overtime, with little or no effort made by employers to keep track of the number of hours worked each week.
In addition to their overtime slipping by unnoticed, postdocs inadvertently meet other criteria that exclude them from overtime pay. As well as setting an hourly threshold of 40 hours per week for overtime pay, the FLSA also time is received by enforcing a precise salary threshold. If the salary falls above an established threshold, the worker is not entitled to compensation for any overtime. The current overtime salary threshold in the United States, which was originally set over 10 years ago and has not been adjusted since to match subsequent financial inflation, is $23,660 per year. Since postdoctoral salaries vary greatly, with the majority of postdocs earning an average of $45,000, this makes most postdocs exempt from overtime pay.
However, as of December 1st this year, the new salary threshold will be $47,476. Accordingly, this means that any postdoctoral researcher employed in the United States, earning less than $47,476 and working more than 40 hours per week will be entitled to overtime pay. There are only a few exceptions to the new rule; postdocs with a primary teaching duty, for instance, are not covered by the new salary threshold, so will not necessarily be affected. Similarly to teaching postdocs, House Officers such as those at NC State’s College of Veterinary Medicine, who are considered medical professionals, will also be exempt, regardless of salary, and will continue to be treated as a population with policies separate to postdoctoral policies. However, certain individual institutions may decide to include teaching postdoctoral scholars in the threshold increase to allow all postdocs to benefit from the new Overtime Rule.
“‘Teaching’ is one of a small handful of occupations which is considered automatically exempt from the new FLSA,” says Siarra Dickey, Manager of Graduate Appointments, Fellowships and Postdocs at NC State University. “But at NC State, although no final decisions have been made, we are seeking resolutions that will avoid treating our teaching postdocs differently to our research postdocs, which is in line with our current practices”.
By raising the salary threshold, the new Overtime Rule will offer a different but narrow selection of options to employers. Making a choice between these options is mandatory for every Principal Investigator (PI), or faculty advisor, and institution that employs postdocs, and the decision must be reached and enforced from December 1st, 2016. Importantly, to a certain extent, implementation of the new FLSA is made at the discretion of each individual PI and their postdoctorate. Consequently, it is fundamentally imperative that postdocs also accept and adhere to the new Act, and do not avoid reporting overtime in their timesheets to circumvent the receipt of overtime pay.
To acquiesce to the new FLSA, employers can either increase the salaries of their postdocs to meet the threshold level, such that they no longer qualify for overtime pay even if they work more than 40 hours per week, or they can track the overtime undertaken by postdocs and pay the required time-and-a-half wage. Additionally, employers have the option of restricting postdoctoral work to 40 hours per week – but with research notoriously demanding excessive workloads, employers are less likely to choose this route.
“The current options at NC State are to increase the postdoctoral scholar’s salary, or track each postdoc’s working hours using a timesheet just like other full-time research appointments already use,” says Dickey. “There has not yet been a University-wide ruling, but at NC State we are encouraging departments and colleges to increase the salaries of their postdocs to meet the new threshold of $47,476 rather than track overtime. We have already started to see some departments rise to this challenge. If postdocs have questions or concerns, we would encourage that they talk to their faculty mentors and departments.”
In the current economic climate, with research still tentatively recovering from financial shortages and cutbacks, there has been understandable concern nationwide about how cost-effective this change will be and how much the salary increase will drain already depleted institutional funds. Whether the transition will be completed smoothly is also debatable; with the deadline of December 1st fast approaching, research institutions have had little time to adjust their budgets. There has also been rational speculation about the potential influence the new threshold will have on the length of secured employment. Research grants are finite sums of money, with specific quantities intended to cover the project duration allocated to employee salaries as well as research expenses. If postdoctoral salaries are to suddenly soak up a greater portion of the grant, it surely follows that either the project duration or money spent on research activities will be diminished.
“There is of course concern that a salary increase means postdocs will find themselves out of work sooner, simply because the raised salaries will eat through the grant at a faster rate,” says Dickey. For postdoctoral researchers looking towards their next position, the salary increase also threatens to diminish new funding after their current grant ends. “There will be an adjustment period,” says Dickey. “But we do expect postdoc positions to rise up again. It is our perspective that new grants will be better prepared for this change in salary in expectations for postdocs.”
As a federal ruling from the Department of Labor, implantation of the FLSA is non- negotiable. “Administratively this will be challenging,” continues Dickey. “There will be a major culture shift in the research population, but NC State fully supports this law because it will ensure fair pay for postdocs who we all know work very tough, long hours.”
Despite coherent concerns, NC State’s support joins a chorus of backing from frontrunners of research and labor laws. In an article published by the Huffington Post, Francis Collins, Director of the National Institutes of Health (NIH), and Thomas Perez, United States Secretary of Labor, quelled apprehensions by giving their own reasons as to how the change will be a positive one for postdocs and the future of academic research. According to Collins and Perez, it is widely acknowledged that current postdoctoral salaries do not satisfactorily reflect the researchers’ education, experience and knowledge. To try to correct this imbalance, the NIH has already been driving a steady increase in postdoc salaries.
“We are confident that the issues coupled to the increase in postdoc salaries will be short- lived,” says Dickey. “We have had positive feedback from the NIH and the National Science Foundation (NSF), both leaders in grant funding.” As well as allowing re-budgets on current grants, the NIH and NSF are evaluating potential changes to new funding; grants will be increased to compensate for the rise in salary.
Another related issue that the new FLSA is likely to help solve is the ever-expanding growth of the postdoctoral population. This problem is thought to have been driven by a combination of funding cutbacks, leading to fewer permanent, faculty and tenure-track vacancies, and continuous stream of PhD students being fed into academia, who eventually have limited career options. According to Collins and Perez, increasing the salary threshold will encourage an even greater influx of graduate students onto the postdoctoral path. While it is undoubtedly agreeable to see postdocs being rewarded for their hard work, will this salary increase help solve the problem of the postdoc bubble?
“There are many pieces to this specific problem,” says Dickey. “But ultimately the salary increase will only improve the quality of research. As funding sources react and grants compensate for the change, better opportunities will be created for postdocs and the recruitment of excellent researchers will continue.
In a discussion with Nature earlier this year, Benjamin Corb, Director of Public Affairs at the American Society for Biochemistry and Molecular Biology (ASBMB), stated that he believed increasing the salary threshold could help the research system recover. By making postdoctoral researchers more expensive, they will no longer be “seen as a cheap substitute”. Although the number of postdoctoral positions may diminish as research institutions adjust to the change, permanent staff scientist positions could appear and provide an alternative, more stable employment option to both institutions and their researchers. In this manner, the postdoc population could be streamlined without causing unemployment.
Inevitably, as with the arrival of any change, the long-term impact will be unpredictable, but the acute effects will be felt most strongly by current postdoctoral scholars. Importantly, although concerns about the new Overtime Rule exist, the ensuing changes, both distant and near, will hopefully be positive and force a much-needed reorganization and reformation of research. For all their hard work and experience, the salary increase for postdoctoral researchers has been long overdue. Adjustment will take time, but the new FLSA will ultimately and rightfully increase the wages of some of the hardest working personnel in academic research.