Changes to employee benefits for scientists after FLSA

Changes to employee benefits for scientists after FLSA

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).

We have been focusing on postdoctoral researchers (all postdocs working at a U.S. institution who are not in a primarily teaching role come under this ruling regardless of visa or funding source). But this also covers a range of other staff titles, such as staff scientists and technical staff. These staff may be easier to track on an hourly basis because of their difference in duties – namely, that they are not viewed as trainees seeking independent positions as part of their role – but some of them, who may have been exempt previously due to meeting the salary and duties exemptions here* may be becoming non-exempt.

Separate from the salary issue, what is happening to benefits for all of these scientists? Those moving from exempt status to non-exempt status need to consider that those benefits are often very different. In light of the information discussed below, it would be interesting to hear more if benefits for non-exempt employees are changing at institutions – please feel free to get in touch at


Institutional attitudes to postdoc benefits

Fringe benefit rates are determined by institutions to budget for fringe benefit contributions from research proposals. These cover things like health insurance, social security, and retirement plans. As described here in the guide to fringe benefits at UCSF, these rates are expressed as a percentage of salary.

In light of the salary increases due to FLSA, these rates, and postdoctoral contributions, are being re-examined. For example, we have already highlighted on our FLSA and postdocs resource that the University of Alabama Birmingham will require postdoc employees to pay 25% of their health insurance plan premiums beginning January 1, 2017. This estimated cost ranges from $900-$3000. As pointed out in the section on “questions from postdocs”:

The salary increase is less than the health insurance premium. So, technically my net salary will decrease. Are there going to be adjustments to off-set this decrease?

The response provided:

Mentors are highly encouraged to provide funds to off-set health insurance costs. This change qualifies for bridge funding provided from Central Administration and the Dean of your school.

Another question asks:

Why is health insurance even part of this? Nothing I’ve seen discussed by NIH even mentioned insurance as part of the FSLA changes.

The response provided:

The health insurance changes are not directly tied to the FLSA changes. But in order to offset the costs of increased salaries the health insurance change will help reduce composite fringe benefit rates for FY2018. This will allow mentors to maintain postdoctoral positions while still having funds for other research needs.

Some institutions, in complying with the FLSA, appear to be attempting to recover costs through reduction of benefits.


Institutional approaches to fringe benefits and the FLSA

Recently Donald Thomason, at the University of Tennessee Health Sciences Center, conducted an informal survey on how institutions were adapting their fringe benefit rates, and kindly agreed to share the results with us.

He prefaced the survey with:

“As the FLSA has shaken (out) at our institutions, I am trying to get a sense of the rate at which institutions have retained their negotiated rate for Postdocs (ours is 8%) versus the salaried employee fringe rate (33% for us). I have always argued that, as trainees, these stipends provide unique opportunities and expectations from the Postdoctoral Fellows that differ from the regular employees (e.g., Research Associate):

  • Postdoctoral Fellows are uniquely situated in the research scientist career training and advancement pathway;
  • Postdoctoral Fellows are expected to submit grant applications as a part of their education and career advancement, requiring a commitment of University resources;
  • Postdoctoral Fellows at UTHSC have a limited-term training appointment of no more than 5 years in a single laboratory and no more than 8 years total;
  • Postdoctoral Fellows are annually evaluated for their training progress, and outcomes metrics are reported to the Board of Trustees in the same manner as graduate student learning outcomes;
  • Postdoctoral Fellows must have an affirmative annual reappointment in order to remain a Fellow at UTHSC;
  • the majority of Postdoctoral Fellows enjoy J-1 non-immigrant exchange visa status, so many may be required to return to their home country for two years prior to conversion of their visa status**

If you would, please, reply to me regarding whether you have reclassified Postdoctoral Fellows as regular employees with the commensurate fringe benefits, or if they will retain the trainee status fringe benefit rate at your institution?”


The results came in as follows:

From 30 responses, 60% of the respondents have, or plan to have, a unique classification of research postdoctoral employees at a fringe benefit rate that is less than other full-time employees.

These are the current rates for postdoctoral fringe benefits at the surveyed institutions:


The numbers are not entirely accurate due to differences in whether institutions include health insurance in the fringe rate (e.g. This would put UTHSC at 13%, not 8%).


Benefits for those affected by the FLSA

There are institutions who, in complying with the FLSA, appear to be attempting to recover costs through reduction of benefits, in a similar manner to declarations by some institutions that they consider postdocs on stipends FLSA-exempt and therefore do not consider that they have an obligation to subsidize stipends less than the FLSA exemption minimum.

In “Employee Benefits: Plight of the Postdoc,” issues such as covering child care, saving for retirement and even basic medical coverage – all critical factors in whether scientists at this stage of training are able to stay in academia – were described in 2015 as areas that were already of concern to the postdoctoral population. Moving to now recover costs due to the FLSA through readjusting benefits can, like the worsening situation of postdoctoral fellowships, further select out those from academia who cannot afford to stay within it, such as those who want to have children.

This issue may not only apply to the postdoctoral population. As salaries are raised and institutions look more widely to recover costs, other affected populations should look into what changes could be ahead for them, or how benefits differ for those moving from exempt to non-exempt status. Please get in touch if you have information that may be useful about this issue.



*under these duties exemptions, technicians who spend all their time at the bench should already have been non-exempt and in theory should not be seeing any change. This has been a topic of some informal discussion and we’re interested in hearing from technicians in various roles and with various duties on this issue, please pass info along to

**the 2-year home requirement can be waived (e.g. see here) as long as you are not paid by the US government/your home government as part of an exchange; as long as you are not in a list of identified areas of need by the State Department at the request of your home government (most often, this applies to those with medical training); and as long as you are not getting graduate medical training. A precise handle on the numbers is difficult, but: most postdocs are international and most of those are on J1 temporary visitor visas; however it is not clear that most of them fall under this requirement, as most postdocs are funded on research grants and most postdocs are not medically trained or receiving medical training. Many postdocs stay and transition onto H1B visas and to Green Cards, and so we feel an assumption that most postdocs will leave the U.S. after their training is no more justified than for any other employee position.

1 Comment

  1. Good information Gary. Some campuses are looking at reducing the fringe rate for postdocs and keeping the benefits at current levels by setting all postdocs up on a stand alone insurance program. Because the postdocs as a whole are so young and healthy compared to the faculty/staff, the campus can offer close to the same benefits at a much lower cost. This will allow the P.I. to offset much of the required salary increase.


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