A recent wage and hour settlement between Hofstra University and 256 student workers highlights the pitfalls faced by a college or university employing students.

Last week, a federal judge in New York approved a settlement of the claims of 256 Hofstra University student employees that the University failed to pay them minimum wage and overtime, in violation of the federal Fair Labor Standards Act (FLSA). Pursuant to the terms of the settlement, the University will pay nearly half a million dollars to the plaintiff class.

Lead plaintiff Lauren Summa alleged that she worked more than 40 hours per week during the fall semester as the manager of the football team and in other jobs on campus, yet was paid only a $700 stipend for the entire semester. In 2008, the court conditionally certified a class of current and former graduate and undergraduate students who had worked at the University for the preceding three years.

This case serves as a reminder to all institutions of higher education that students who are engaged to perform jobs for the institution should be treated as any other employee and paid in accordance with federal and state wage and hour laws. This means that, absent an applicable exemption, students should be paid at least minimum wage for all hours worked and should be paid overtime for hours worked in excess of 40 hours per workweek. Every student’s hours of work also should be tracked and recorded to ensure compliance with statutory recordkeeping requirements and proper payment of wages.

All institutions of higher education should evaluate their wage and hour practices with respect to student workers. Additionally, it is important to keep in mind that the National Labor Relations Board (NLRB) appears poised to again issue a ruling on the employment status of graduate teaching and research assistants receiving stipends for performing duties in connection with their graduate programs. If the NLRB determines that teaching and research assistants are employees who are entitled to unionize, such a ruling also could expose colleges and universities to potential liability under the FLSA, given that universities typically do not employ the same type of recordkeeping for such assistants as they do for other employees or closely monitor the number of hours worked by students in connection with graduate programs.