Institutions declaring postdoc “fellows” FLSA exempt
On Dec 1st, the threshold at which salaried workers receive overtime payment for working more than 40 hours per week will increase from $23,660 to $47,476 per year, under updates to the Fair Labor Standards Act (FLSA). All postdocs working in the U.S. who are not in a primarily teaching role, come under this ruling, regardless of visa or funding source.
Or do they? Because as we discussed in a recent post, in building our FLSA and postdocs resource, Brandeis are taking the opinion that postdocs who are directly paid on stipends – namely, postdoctoral “fellows” – are FLSA exempt. Recently, Brown University also publicly made this assertion.
Here is the view of Brandeis:
Here is the view of Brown:
Why is this line being taken? Postdoc fellowships come from a variety of sources and countries. They are often “paid direct” to the postdoc and not through the institution; and they may not meet the new FLSA minimum. If institutions believe these postdocs are not covered by the FLSA, then they may make the case that their salaries do not need to be supplemented to meet the new FLSA minimum.
Are postdoc fellows exempt?
Postdoc fellows are not considered employees by institutions, as they are not paid by the institution. However, reading the directions from the Department of Labor, that is not the same as being recognized as exempt from the FLSA.
A postdoc is federally recognized as both a trainee and an employee (Code of Federal Regulations, Title 2, part 200.400(f)) and unless they are in a primarily teaching role, all postdocs regardless of funding source and visa status come under the FLSA (see Overtime Final Rule and Higher Education). In addition, the Department of Labor defines what “employ’ means in the context of the FLSA:
“The FLSA defines the term “employ” to include the words “suffer or permit to work”. Suffer or permit to work means that if an employer requires or allows employees to work, the time spent is generally hours worked.”
The “employer” is the institution that “suffers [someone] to work,” so institutions are the ones responsible for ensuring FLSA compliance. Postdoc fellows are “permitted” to work at the institution. It is our understanding that if fellowships do not pay full FLSA rates, the employer is still responsible for making sure employees get supplemented up to federal standards. What matters is not where the money comes from, but what a person is doing at an institution that “suffers or permits them to work” there.
At time of writing, Brandeis has not responded to requests for further information/the legal justification of this position. Brown has put us in contact with their legal team at the Office of General Counsel.
The only potential loophole is if fellows are treated as outside contractors; however because of the “suffer or permit to work” language, and the fact that they are carrying out the same work, this seems a grey area.
What is the general approach to postdoc fellows?
It is interesting to consider whether institutions would choose to allow the possibility for a legal challenge. The risks involved perhaps are illustrated by the fact that these are (so far) the only two institutions who have taken this position. The vast majority of institutions, in addition to raising salaries, are also mandating that fellowships not up to FLSA exemption are supplemented. This is the case for institutions from Boston University to the recently-announced decisions at University of California:
“Fellows [postdocs paid directly on fellowship stipends] receive all the benefits of the contract including the same salary levels as grant-funded postdocs. If a fellowship pays less than the minimum salary scale, the postdoc’s pay is supplemented through other funds to reach at least the negotiated minimum.”
Making fellowships even more unattractive
Differentiating classes of postdocs in this way is against the spirit of academia. This is aggravating an already-identified issue with postdoctoral fellowships, that they are becoming accomplishments that are available only to those who can afford them. Postdocs getting fellowships already face losing benefits, or dealing with issues such as imputed income tax. This has led to groups such as the Boston Postdoctoral Association calling for equal benefits as a priority in their recommended postdoc policies:
If postdocs on fellowships are also expected to be on lower salaries, as well as potentially losing health insurance, childcare or spousal benefits that an institution provides, this will select further for those who can afford to lose earning potential and benefits. We believe that attempting to exempt postdocs on stipends from the FLSA is not in the spirit of the DoL’s ruling; not in the spirit of academia; and will actively harm efforts to promote diversity and inclusion in academia.
It is vitally important that postdocs considering these fellowships are aware of what institutional policies are regarding this and we will continue to provide updates on this as we hear more.