Budget & Finance

Districts Scramble to Comply With New Overtime Rule

By Evie Blad — May 21, 2024 2 min read
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Implementing a new federal overtime rule will present logistical challenges for school districts, which must adjust their policies and operations within two months to comply with the mandate, education organizations said.

The rule, announced by the U.S. Department of Labor on April 23, raises the minimum salary threshold required for non-teaching workers to be exempt from overtime requirements, which means many districts will have to pay overtime to employees like nurses, athletic trainers, and librarians who previously earned too much to qualify.

Citing concerns about a tight timeline, two education groups signed a May 9 letter to the Labor Department requesting that the agency delay the July 1 implementation date until at least September.

The current timeline gives employers two months “to analyze the rule, determine what changes to their operations and payrolls will be necessary, explain to the impacted workers how and why their pay, titles, or workplace responsibilities will change, and then implement those changes,” said the letter signed by a coalition of employment and industry groups, including the Association of School Business Officials and AASA, the School Superintendents Association.

Since 2019, eligible employees who earn less than $35,308 a year have qualified for overtime pay if they work more than 40 hours a week. The new federal rule will increase that salary maximum level to $43,888, and again to $58,656 on Jan. 1, 2025. Salary thresholds will update every three years starting in July 2027, relying on new federal data on average wages, the Labor Department said in April.

Teachers remain exempt from the overtime rule, despite a push from unions to include them in the mandate.

To prepare for the rule’s implementation, districts must decide if they will restructure employees’ responsibilities to reduce the likelihood of overtime hours, hire additional staff to reduce workloads, or provide slight pay increases to employees near the exemption threshold, said Noelle Ellerson Ng, the associate executive director of advocacy and governance for AASA. Districts that opt to pay overtime to their newly qualified employees may have to adopt new methods to track their work hours and ensure compliance with the rule, she said.

“The biggest concern is how quick the timeline is,” Ng said, adding that districts are “trying to balance what’s most fiscally responsible with what’s least disruptive.”

Most districts passed budgets for the next fiscal year in March or April, before the rule was finalized, but they have known about the potential changes since September, when the Labor Department released a draft proposal.

The Labor Department is unlikely to grant the delay request because the policy was announced after it went through the federal review process, receiving 33,000 public comments. The coalition that signed the May letter sent a similar request for a delay before the rule was finalized, which the agency considered before publishing the regulation.

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