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UGA’s Payroll Change Won’t Be Much Fun for Employees

Many University of Georgia employees are upset about a change in the university’s payroll schedule that means they’ll take home a little less money most months, and part of their pay for November will be delayed.

Under new federal labor rules that take effect Dec. 1, about 4 million workers nationwide will become eligible for overtime. Employers will be required to pay overtime to most workers who earn less than $47,476 a year—double the current threshold—when they work more than 40 hours in a week.

As a result, about 3,000 UGA employees who are paid monthly now will be paid biweekly starting in December, meaning that 10 months out of the year they’ll take home less, although their monthly bills will stay the same. (They’ll also get a third check during two months.) In addition, the biweekly checks will lag about 10 days behind pay periods while human resources calculates overtime, so those employees will only be paid for half a month in November; their checks for the last two weeks of the month won’t arrive until Dec. 9. (The university is letting affected employees cash in their time off during November to make up the shortfall.) Yet deductions such as insurance premiums for the full month will be taken out of the half-check in November.

“When one of these workers is struggling to deal with their new tighter budgets, waiting for the next month with three paychecks, the fact they now officially qualify for overtime will be of little comfort given that most will never earn any overtime thanks to employers limiting their hours to 40,” UGA economist Jeffrey Dorfman wrote in a blog post for Forbes. “While the phrase has often been used in a mocking and unfair sense, this may be one of the few times when the intentionally sarcastic phrase, ‘Thanks, Obama,’ fits perfectly.”

While the change to the Fair Labor Standards Act doesn’t require UGA to start paying people every two weeks, it’s “a nightmare” to calculate overtime when employees are paid monthly because a work week is divided between two pay periods, Janet Hill, a local labor lawyer, told Flagpole.

Although the change has led to a lot of grumbling, “I do think that overall it’s a good change,” Hill said. “You have people at the university who are called supervisors, and maybe they are, but they only have to make $23,000 a year [to be exempt from overtime]. That’s not really a manager’s pay.” The FLSA originally exempted only upper-level management, but as salaries have risen the threshold has become badly outdated, she said.

The new rule will also benefit workers in the service industry and retail—sectors where the current overtime rules are often abused. For example, a fast-food manager doesn’t have to be paid overtime, but that manager is probably more of a glorified fry cook, in violation of the spirit, if not the letter, of the law. “You’re the person who gets to work an extra 10–12 hours a week [for free] because you don’t get paid overtime,” Hill said.

Not everyone who earns less than $47,000 a year will be classified as non-exempt. Some, such as teachers and people in “creative” fields, will remain exempt and won’t be eligible for overtime. And one difference between the private sector and government, including higher education, is that government has the option of giving employees comp time rather than overtime. So a UGA employee who works 44 hours in a week might get six hours off (at time-and-a-half) instead of money.