Talking Stick - July/August 2016 - 54

t all started about a year ago.

In July 2015, in response to a request by U.S. President Barack Obama, the Department of
Labor (DOL) proposed a number of updates to the Fair Labor Standards Act (FLSA). Nestled in
with all the other amendments was an increase in the exempt salary threshold. This is the amount
of money that an employee must earn in order to be exempt from receiving overtime pay for
working more than 40 hours per week. This news caught the attention of virtually every employer,
including campus housing departments. In a field where, for many staff, the traditional 40-hour work week
is the exception more than the rule, these changes were certain to have a dramatic impact. The only thing
left to discover was what that new exemption level would be.

Then, in May, the news was released that the
exemption level would be increased from $23,660
- where it had sat since 2004 - to $47,476, or $913
a week. While it was originally proposed that these
changes would have to be enacted within 60 days,
the DOL recognized that organizational decision
makers needed more time to consult about the
evaluation of job responsibilities, the reclassification
of staff, and the messaging associated with
potentially significant operational changes and
extended the deadline until December 1.
Of particular concern for housing professionals
was the impact of the new threshold for entrylevel, live-in staff compensation. According to
the ACUHO-I 2015 Operational Survey, most
in these positions earn between $27,000 and
$34,000: far less than the threshold. And, while
the compensation for many of these staff typically
includes a full or partial meal plan and an oncampus apartment, only actual dollars can be
counted towards their gross income for taxation
and FLSA purposes. According to the Internal
Revenue Service, accounting for room and
board is problematic when it is required for the
employee and the live-in situation is primarily for
the "convenience of the employer." Kathy Bush

TALKING STICK

Hobgood, assistant vice president for student
affairs and executive director of university housing
and dining at Clemson University in South
Carolina, explains the IRS regulation: "In order for
it to count, it has to be optional. If I was offering
something, and I didn't care if they took it or not,
and they decided to take it, I might be able to
count that then. But if I'm going to require you
to live there, it really does have that piece [for the
convenience of the employer]."
With the realization that the price of staff room
and board could not count toward the salary
exemption - and that campuses would not be
allowed to raise staff salaries and then charge the
staff for their accommodations - the scope of FLSA
changes quickly grew beyond the budget balance
sheet and began to affect the way that campuses
might approach their housing staffing and services.
This is not to dismiss the financial impact of
these changes. Far from it. As an example, using
the original proposed salary threshold ($50,440),
a rumored compromise level ($47,000), salary
information reported to ACUHO-I through the
Operational Survey, and the available Integrated
Postsecondary Education Data System data
associated with the provision of on-campus

Talking Stick - July/August 2016

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