The University of Kentucky will adopt new federal overtime rules that were slated to start Dec. 1 until a recent court ruling from Texas put them on hold.
Last May, the U.S. Department of Labor announced changes under the Fair Labor Standards Act that would raise the minimum salary eligible for overtime pay from $23,660 to $47,476 a year. That means employees making less than $47,476 would have to be paid on an hourly basis so they are eligible for overtime.
On Nov. 22, U.S. District Judge Amos Mazzant of the Eastern District of Texas issued a preliminary injunction to delay implementation of the change. A lengthy court process will probably follow.
Since May, “we have communicated with hundreds of employees and their supervisors about these changes, and we believe it is the right thing to do to honor the commitments we have made,” UK Executive Vice President Eric Monday and Provost Tim Tracy said in a campus-wide email Tuesday. “Although there has been — and will continue to be — ongoing questions about this issue, the university believes it is appropriate and important to move ahead with these changes.”
UK — Lexington’s largest employer — is joining other schools such as Eastern Kentucky University and the University of Louisville in making the change. But other Lexington employers are taking a wait-and-see approach.
Susan Straub, spokeswoman for Lexington Mayor Jim Gray, said the city will wait until the federal overtime decision is final before making any changes. So did officials from other big employers, such as KentuckyOne Health and Baptist Health.
“At this time, we are going to maintain our employees in their current classifications as of the date of the court ruling,” said Baptist Health Lexington spokeswoman Ruth Ann Childers. “We are planning to wait for further court rulings regarding this matter.”
UK spokesman Jay Blanton said the change will affect about 800 people and it will cost the university more than $2 million right away. It will take a year to determine how much overtime will cost down the road.
Part of the $2 million cost includes raising the pay of people who make close to the $47, 476 limit, which will exempt them from the overtime rules. That includes nearly 200 postdoctoral graduate students, who are mostly funded with grants, but will get a salary bump from UK.
Those higher salaries for staff and postdoctoral students “will make us more competitive with other institutions,” Blanton said.
“This was the right thing to do,” Blanton said. “We are honoring the commitments we have made to employees. We have been telling a large number of employees to expect changes to their salaries and job duties for nearly a year.”