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Second Opinion

Learn about policy issues important to medical schools and teaching hospitals, with Executive Vice President Atul Grover, M.D., Ph.D.

Washington Highlights

Labor Department Releases Overtime Final Rule

May 20, 2016—The U.S. Department of Labor (DOL) May 18 published its final rule titled Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees under the Fair Labor Standards Act (FLSA). The DOL worked with the National Institutes of Health (NIH) to align the salary threshold for FLSA overtime requirements with NIH postdoctoral stipends as recommended by AAMC in September, but failed to wholly exempt postdoctoral researchers [see Washington Highlights, Sept. 18, 2015].

Effective Dec. 1, 2016, the final rule increases the salary threshold for exempting certain employees from FLSA overtime requirements to the “40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region,” updated every three years. Under this formula, the final rule raises the salary threshold from $23,660 to $47,476 for a full-year worker. The DOL had originally proposed a threshold of $50,440, using the national 40th percentile.

Licensed physicians, medical interns/residents, podiatrists, dentists, and optometrists are FLSA exempt regardless of compensation. Teachers and graduate students engaged in research under a faculty member’s supervision in the course of obtaining a degree are also exempt. Academic administrative personnel are not entitled to overtime compensation if they are paid at least as much as the entrance salary for teachers at their institution. Postdoctoral researchers who engage only in research and do not teach are subject to the new salary threshold. 

In response to the FLSA revisions, NIH Director Francis Collins, MD, PhD, announced that the NIH will increase the awards for postdoctoral Ruth L. Kirschstein National Research Service Award (NRSA) recipients to levels above the new salary threshold.

Sen. Tim Scott (R-S.C.) and Rep. Tim Walberg (R-Mich.) March 17 introduced the Protecting Workplace Advancement and Opportunity Act (S. 2707, H.R. 4773), which would require DOL to perform a detailed impact analysis prior to implementing the final rule. Both bills have garnered strong support from their Republican colleagues, but failed to secure any cosponsors from the other side of the aisle. 

Senate HELP Committee Chair Lamar Alexander (R-Tenn.) said he would introduce a resolution to block the rule under the Congressional Review Act. The Congressional Review Act allows Congress to overrule federal regulations within 60 legislative days through an expedited process.

Contact:

Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-862-6116
Email: mshick@aamc.org

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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.


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For More Information

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org