Luzerne County manager search off to a rocky start

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The Lion King Jr. at St. Nicholas-St Mary’s

<p>In July 2015, the U.S. Department of Labor proposed a rule change that would increase the level at which an employee becomes eligible for paid overtime. The current level &#8211; $23,660 &#8211; was established in 2004 and is, in my view, long overdue for an increase. The new rule would apply to salaried employees who have primarily executive, administrative, or professional duties.</p><p>The federal government has proposed to make professional employees earning $50,440 or less eligible for overtime pay. That more than 100-percent increase is shocking as it is far more than wages have risen during the past decade. Hopefully, the Department of Labor will set the new rate at something that is more in line with the increases in inflation. An adjustment for inflation would take the level to $29,172, according to an analysis by the American Council on Education.</p><p>The larger increase would cause some unexpected problems and challenges. For example, nonprofits and corporations that derive their revenue from a fixed source, such as Medicaid payments, would not have the ability to increase revenue. Facing increased costs, these enterprises would be forced to reduce services to clients. Many social service agencies spend most of their budgets on salaries, so we can imagine that they would have to reduce staffing significantly. It is difficult to imagine a way that these agencies could effectively meet their obligations and mission in this manner.</p><p>For higher education, the challenges &#8211; while daunting &#8211; are not as overwhelming. Teachers and college faculty are exempt employees, so their salaries would not change. However, many of our colleagues, such as coaches, post-doctoral fellows, student affairs professionals, and admissions recruiters would be impacted by the rule. A coach, for example, would likely be constrained from longer trips to play a game as we seek to limit hourly travel expenses. Opportunities for professional development would also diminish as cost containment becomes the directive.</p><p>Of course, higher education is different from primary and secondary education. We charge tuition that covers most of our costs, the largest of which is salaries. For many colleges and universities, salaries are more than 50 percent of their total budget. Many institutions have almost 80 percent of their budget dedicated to payroll as we are a labor-intensive industry.</p><p>For Misericordia University, the proposed rule change would increase operational costs by about $400,000 annually when factoring in a four-hour-per-week overtime charge for employees. Misericordia has been working diligently for years to ensure it is the most affordable private college in the region. This proposed rule, though, could result in a doubling of our 2.1 percent increase for the average student next academic year.</p><p>The Department of Labor should increase the threshold to be eligible for overtime, but do it in gradual increments so employers can plan more effectively for the added costs. The total increase, though, should more closely approximate the inflation rate, while future increases should be tied to the consumer price index, much as Social Security increases have been indexed.</p><p>Paying a fair wage to all is good practice and the right thing to do. Forcing decreases in the services provided by essential nonprofits is not a sound business decision, nor is arbitrarily increasing the cost for students to attend higher education.</p><style>
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<div class="neCaption">Thomas J. Botzman </div></div><div class="metaInfo"><photo0>https://www.timesleader.com/wp-content/uploads/2016/04/web1_Botzman-2c-Thomas-1.jpg</photo0><caption0>Thomas J. Botzman </caption0><photoCredit0></photoCredit0></div></div>
<div class="metaInfo"><bylineMeta><p>Thomas J. Botzman</p><p>Contributing Columnist</p></bylineMeta></div><div class="metaInfo"><factboxMeta><p>Thomas J. Botzman, Ph.D., is president of Misericordia University in Dallas, Pa., the oldest four-year institution of higher education in Luzerne County.</p></factboxMeta></div>

Proposed overtime rules will hurt nonprofits