With the additions of cost-of-attendance payments and unlimited food provisions for student athletes, the expenses of running an athletic department seemingly grow by the month, and it appears financial challenges aren’t going anywhere. The potential ripple effects from a 2014 directive from President Obama regarding changes to the Fair Labor Standards Act will have many in athletic departments scurrying to find even more money to cover their rapidly-swelling budgetary requirements.
The latest cost to ADs is not going to student-athletes, however. Instead, regulations that are yet to be finalized could bump the pay threshold for overtime-eligible workers from $23,660 to $47,476. What this means is right now if an employee receives a salary of more than $23,660, he/she is not owed overtime pay for time spent beyond a forty-hour work week. However, if this baseline salary figure is nearly-doubled as proposed, then those same salaried employees who make less than $47,476 will be paid hourly and become eligible for overtime pay once the forty-hour work week is exceeded.
The financial ramifications for this could be staggering as travel, nights, and weekends are all required elements of running a college athletic department. For example, a story in USA Today noted that for Western Carolina, thirty-nine of the seventy athletic department employees would fall below the new threshold and become non-exempt for overtime pay. This would be an increase from the two currently non-exempt at Western Carolina. Arkansas State’s numbers are similar, with thirty-four of seventy-two employees that would become non-exempt if their salaries stayed the same as right now.
Assuming the new FLSA standards are finalized and implemented, reactions from athletic departments will be varied. For some, the new cost of employment will be a small drop in the financial bucket, resolved by moving money around and little more. For other schools with either a larger percentage of employees shifting to non-exempt status or a smaller, tighter budget, this change could wreak havoc on their bottom lines. Creative work-arounds will be necessary for schools in tough situations, with the unfortunate possibility of firing people being a reality.
At some schools, this change in payment structure might mean overtime-exempt employees must bear the brunt of the extra-hours work in an attempt to avoid paying non-exempt workers overtime rates. This could lead to unbalanced workloads and burnout for those having to stay late or work on weekends because they’re above the $47,476 non-exempt threshold. Perhaps some hold the viewpoint that more hours should be worked by those who make more than others in the department, but work-life balance and equity are delicate and sensitive subjects in many offices, something of which HR departments will need to be aware.
While awaiting finalization, questions for athletic departments abound. Will schools give raises to some of their newly non-exempt employees to bring them just above the exempt threshold and fire others to free-up the funding? Or will current overtime-exempt employees simply become non-exempt and departments will keep them limited to forty-hour work weeks? Will the departments then have to ask more of their exempt members, perhaps leading to burnout or requiring pay raises for them as well?
Amidst many questions, one can certainly hope that the good intentions of these FLSA adjustments will not hurt student-athletes by siphoning-off resources allocated to their safety or education or lead to mandatory lay-offs across university athletic departments.