How labor reform might overhaul postdoc pay

A proposed rule from the U.S. Department of Labor could soon mandate that postdocs making less than $50,440 per year will be eligible for overtime pay at 1.5 times their hourly rate. Research labs are generally not prepared to track overtime hours and many do not have the additional funds available to pay postdocs above their current stipend. As the Department of Labor deliberates on the final rule, many questions remain. We outline the issue along with some concerns and potential outcomes in this post.

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Postdocs often join research groups to expand their training and expertise in a well-defined corner of science by training with an established and respected mentor. In fact, this once optional training period has become almost required in the life sciences.

In many ways, a postdoctoral position is like other early career positions outside of academia: the hours are long, the daily tasks aren’t always glamorous, and your boss–or primary investigator (PI) in the case of a postdoc – can influence your future success. However, postdocs are anything but green entry-level employees; they are highly trained individuals who have worked on an independent research project in a research laboratory through 5-7 years of graduate study.

When it comes to pay for postdocs, most universities follow the minimum salary guidelines for trainees set by the National Institutes of Health (NIH) for those on National Research Service Award traineeships and fellowships, which pays a first year postdoc with no experience $42,840  But everyone isn’t paid from this type of grant and many earn salaries lower than this minimum.  One survey reports that the earnings vary between $37,000 and $63,000 per year for postdocs in the United States.  Add this to the fact that many of the nation’s top universities where postdocs congregate are located in some of the country’s most expensive cities. Consider this monthly salary for a single individual living in Boston—which is home to several of the top genetics programs in the country— where the average rent for the metropolitan area was $1200 per month in 2014. It’s probably no surprise that postdocs quickly saw President Obama’s announcement to alter overtime exemption requirements as an opportunity to shed light on their situation.

The legislation in question is the Fair Labor Standards Act (FLSA), which establishes minimum wage, overtime pay, and other employment standards affecting employees in the private sector and in Federal, State, and local governments. The proposed change to FLSA would mandate that employees with a salary under $50,440 would be classified as “non-exempt” and be eligible for overtime pay at a rate of 1.5 times the hourly rate.

Postdocs across America rallied behind the proposed rule change, signing petitions and writing letters asking for an increase in minimum salary to $50,440 or to be considered for overtime pay. Organizations like the National Postdoctoral Association and the University of California’s postdoctoral union, UAW Local 5810, wrote position statements urging the Department of Labor to implement the proposal, converting a large sector of the scientific workforce from exempt to non-exempt status. Other groups like the American Society for Biochemistry and Molecular Biology and the American Association of Medical Colleges issued statements advocating for any change to be incremental. With the comment period now closed, the Department of Labor is deliberating on the information gathered and will issue its final ruling in July 2016, according to the proposed timeline.

While we can’t say what the final ruling will be, GSA explores some of the potential outcomes for postdocs and the scientific enterprise if the rule is implemented to require that postdocs paid under $50,440 be paid overtime.

In one scenario, an institution could pay postdocs overtime. This possibility requires a significant administrative burden on the PI, the postdoc, and the institution. The postdoc would have to document all hours worked to determine which should be considered for overtime—a departure from the average academic laboratory culture. The PI would have a more difficult time estimating the cost of postdocs for budgets in grant proposals and justifications. Paying overtime to postdocs who regularly work well beyond 40 hours per week would likely cause a reduction in such positions in even well-funded research groups.

In another scenario, an institution could opt to raise the postdoc salary to at least $50,440. This option would require PIs to identify ways to meet the higher salary requirement from existing grant funds—at least for the first year or two of implementation. Funding Agencies could increase the amount of funding per grant to offset these costs, but this would require steep budget increases from Congress. It is more likely that providing this raise will lead to a reduction in postdoc positions across labs.

In a third scenario, the Department of Labor could explicitly exempt postdocs or training positions more generally from these classifications. Currently postdocs paid from research grants awarded to their PI are generally considered employees by institutions, while postdocs with individual fellowships and traineeships are classified as trainees. Should the rule be amended to include language specific to postdocs, this discrepancy would have to be addressed. If the proposed policy mandates that institutions change the way they classify postdocs, then the rule will impact benefits, visas, taxes, and more.

Rapid changes to the system could have dramatic implications. Even the National Postdoctoral Association has called for a graduated approach to increasing stipends. Without an increase in federal funding, the long term effect would inevitably be a reduction in the number of academic postdocs. Studies on the biomedical workforce have called for such a decrease for years (e.g., a 2000 report from the National Academies of Sciences, Engineering, and Medicine) as a remedy to the low postdoc salary; however, phase-in would not be simple.

NIH raised its minimum postdoc salary for fellowship recipients by 7% in 2014 and again by 2% in 2015 in response to a 2012 Report from the Biomedical Workforce Working Group that called for stipend levels to “better reflect years of training.” If the implementation time for these recommendations is a bellwether, it could take a few years for the agency to change its salary policies in response to the forthcoming ruling by the Department of Labor.  Unofficial comments from well-informed NIH employees suggest that the agency hopes for an exception or clarification of how it should proceed in the final rule. Congress could also impact the way NIH responds through the legislative process.

While we await the final word on the revised Fair Labor Standards Act, one thing is clear: anyone with a stake in postdoctoral training should be prepared for potential changes.

Do you think academic postdoc salaries should be raised through the mechanism of overtime or a Department of Labor salary minimum? How would an increase in postdoc salary impact your research lab? Share your comments below.