Federal Court Strikes Down Biden’s Overtime Expansion: What This Means for Higher Education

The ruling, delivered by District Judge Sean D. Jordan-appointed by former President Donald Trump-resets the threshold to $35,568, rolling back the July 1 threshold increase to $43,888 and blocking the Jan. 1 threshold increase that would have impacted an estimated 59,000 employees at colleges and universities across the country.

This decision is expected to resonate across higher education, where institutions had been preparing for significant financial and operational shifts. Admissions officers, student affairs professionals, athletics staff, and other roles would have been newly eligible for overtime pay under the expanded threshold. While faculty and other teaching-focused employees remained exempt, the higher education community had voiced concerns that the increase was too steep and too rapid.

Steven Bloom, ACE's assistant vice president for Government Relations, described the challenges to Inside Higher Ed when the draft rule was released in 2023.

"A 55 percent increase would be pretty drastic, potentially detrimental, and highly disruptive to our campuses-particularly if there's no kind of transition period," Bloom noted. He reiterated that while ACE supports "reasonable" changes to the overtime threshold, the proposed policy's timing and scale were problematic.

The challenge lies not just in managing payrolls but in sustaining the unique nature of certain roles within higher education. "If you have employees who are going to go from not getting overtime to getting overtime, institutions are going to be very mindful about how they use those employees and how many hours they work for these types of jobs," Bloom explained. This could alter job structures and limit flexible work arrangements and professional development opportunities.

In issuing the ruling on Nov. 15, Jordan held that the Biden administration's approach effectively rendered job duty considerations secondary to salary alone, exceeding the Department of Labor's authority.

The ruling aligns with a 2017 case where another district judge blocked an Obama-era proposal to raise the overtime threshold to $47,000, similarly citing overreach. The Trump administration's subsequent adjustment in 2019 set the current $35,568 threshold, which many higher education institutions found more manageable.

Bloom's comments reflect ACE's continued advocacy for balanced policies that support employees without destabilizing higher education's financial framework. "What we've said in the past and we'll say again is we're really focused on timing and method for implementing a higher threshold to avoid major disruptions to our campuses," Bloom said.