The start of an academic year compresses months of HR and payroll work into a few weeks. Colleges and universities are onboarding faculty and staff, activating student employment, processing adjunct appointments, updating benefits eligibility, setting up grant-funded positions, and handling employees who may work in multiple departments—or multiple states.

For fall 2026, several of the biggest risks are not new laws. They are old rules applied incorrectly to unusually complex higher-education workforces.

That distinction matters. A payroll system may calculate a check correctly and still leave the institution exposed if the employee was classified incorrectly, hours were credited incorrectly for ACA purposes, student FICA status was wrong, grant labor was charged incorrectly, or a remote employee created a tax obligation in another state.

Here are the areas higher-ed HR, payroll, finance, and academic leadership should review before the fall semester is fully underway.

1. Adjunct Faculty: Separate FLSA Classification From ACA Hours Tracking

Adjunct faculty create two different compliance questions that are often mistakenly treated as one.

FLSA overtime status

Under federal wage-and-hour rules, a bona fide teacher whose primary duty is teaching, tutoring, instructing, or lecturing at an educational establishment can qualify for the teacher exemption. The usual federal salary-level and salary-basis requirements that apply to many white-collar exemptions do not apply to bona fide teachers.

That means institutions should not automatically apply the same salary-threshold analysis used for an administrative coordinator or department manager to an adjunct whose primary duty is teaching.

ACA hours of service

ACA tracking is different. Applicable Large Employers generally must identify full-time employees based on hours of service, and adjunct faculty hours can be difficult to measure because classroom time does not capture preparation, grading, meetings, and related work.

The IRS requires employers to use a reasonable method for crediting adjunct faculty hours until more specific guidance is issued. Institutions should have a documented methodology and apply it consistently. One recognized method described in IRS guidance credits 2.25 hours of service per week for each hour of classroom teaching or instruction, plus one additional hour for each hour of required duties outside the classroom, such as required office hours or faculty meetings. Institutions may use another reasonable method, but they should be able to explain and apply it consistently.

Fall 2026 action

Confirm that:

• adjuncts are correctly treated as employees where the facts require employee status;
• appointment letters state course load, pay, term dates, and expectations;
• the institution's FLSA analysis is distinct from its ACA hours-crediting method;
• the ACA method accounts for work outside scheduled classroom time; and
• adjuncts working for multiple departments are evaluated across the institution, not department by department.

2. Student Workers and Federal Work-Study: Correct the FICA Assumption

Student payroll is one of the easiest places for a higher-ed payroll system to produce a technically consistent but legally incorrect result.

A common misconception is that students are exempt from FICA simply because they are students or because they work a limited number of hours.

The IRS student FICA exception generally applies when services are performed for a school, college, or university by a student who is enrolled and regularly attending classes, and the employment is incident to and for the purpose of pursuing a course of study. IRS safe-harbor guidance generally treats qualifying half-time undergraduate and graduate/professional students as students for this purpose when other conditions are met.

The test is not “working fewer than half-time hours.”

Why fall registration matters

Student status may need to be evaluated after the drop/add period. Payroll and student employment teams should have a repeatable way to receive enrollment changes so FICA treatment is not based on stale information.

Federal Work-Study controls

For FWS and institutional student employment, confirm:

• the correct student-employment and funding codes are used;
• FWS award limits are visible before payroll exceeds the available award;
• payroll knows when a student's enrollment status changes;
• the institution's FICA logic reflects IRS student-status rules;
• students working multiple campus jobs are aggregated where required; and
• finance can reconcile payroll expense to the appropriate federal, institutional, grant, or departmental funding source.

Do not rely on the employee type “student” by itself to determine tax treatment.

Important ACA distinction for Federal Work-Study

For purposes of the ACA Employer Shared Responsibility rules, hours of service performed by students through the federal work-study program—or a substantially similar state or local program—are excluded from ACA hours-of-service calculations. That is separate from FICA treatment and should be reflected in the institution's ACA measurement methodology.

3. Exempt vs. Non-Exempt Staff: Use the Correct 2026 Thresholds

The federal salary threshold for the executive, administrative, and professional exemptions is currently $684 per week ($35,568 annualized) after the 2024 federal overtime rule was vacated.

For New York employers, the analysis cannot stop there. New York imposes higher salary thresholds for the executive and administrative exemptions.

Effective January 1, 2026, the New York minimum weekly salary is:

• $1,275.00 per week in New York City, Nassau, Suffolk, and Westchester; and
• $1,199.10 per week in the remainder of New York State.

The duties test still matters. A title such as “coordinator,” “assistant director,” or “manager” does not make an employee exempt by itself.

Higher-ed roles worth reviewing

• admissions and enrollment staff;
• athletics operations staff;
• lab and research coordinators;
• residence-life staff;
• department administrators;
• program coordinators;
• communications and development staff;
• IT staff; and
• employees splitting time between teaching and administrative duties.

Bona fide teachers are subject to different federal exemption rules, so institutions should classify the actual duties of the position before applying a salary test.

4. ACA Eligibility: Fall Is the Time to Find Measurement-Period Problems

Applicable Large Employers—generally employers averaging at least 50 full-time employees including full-time equivalents in the prior year—must manage Employer Shared Responsibility requirements.

For higher education, the problem is rarely the rule itself. It is the workforce complexity:

• adjuncts;
• variable-hour employees;
• part-time staff with multiple assignments;
• seasonal or event employees;
• coaches and athletic staff;
• employees who shift from part-time to full-time mid-year; and
• employees with academic-year schedules.

Fall 2026 action

Before fall activity peaks, review:

• current look-back measurement periods if the institution uses that method;
• initial measurement periods for new variable-hour employees;
• employees whose combined assignments may push them over full-time thresholds;
• offers of coverage and effective dates for newly eligible employees; and
• the data that will eventually feed ACA reporting.

A department-by-department view is not sufficient if the employee works for the same ALE member across multiple assignments.

5. ACA Reporting Changed: Update the 1095-C Communication Process

The federal Paperwork Burden Reduction Act changed how Forms 1095-C may be furnished to individuals.

Employers still have ACA information-reporting responsibilities. However, under current IRS guidance, an employer may satisfy the individual furnishing requirement through an alternative process if it posts a clear, conspicuous, and accessible website notice explaining that an individual may request a Form 1095-C and then provides the requested form within the required timeframe.

Why this matters now

Fall is a good time to decide whether the institution will:

• continue automatically distributing Forms 1095-C;
• use the permitted request-based furnishing method; or
• use a combination based on operational needs.

Whichever method is chosen, payroll, benefits, HRIS, and employee communications should agree on the process before year-end reporting begins.

6. Form I-9: High-Volume Onboarding Needs a Quality-Control Process

Fall onboarding can involve hundreds or thousands of I-9 transactions in a short period.

Institutions should review:

• Section 1 completion timing;
• Section 2 documentation and deadlines;
• authorized-representative procedures for remote hires;
• reverification and expiring work authorization;
• storage and retention practices; and
• consistency across departments and campuses.

Qualified employers participating in E-Verify may use the DHS-authorized alternative procedure for remote document examination when all requirements are met. Institutions should not assume that any remote hire can automatically be verified remotely under the alternative procedure.

Higher-ed risk area

Decentralized hiring is efficient, but it creates inconsistency. If departments complete their own I-9s, use standardized training, checklists, and periodic audits.

7. Multi-State Remote Employees: Payroll Compliance Follows the Worker

Higher education continues to employ remote admissions staff, online-program personnel, advancement professionals, researchers, administrators, and other employees outside the institution's home state.

A remote employee may create obligations involving:

• state and local income-tax withholding;
• unemployment insurance;
• workers' compensation;
• state disability or paid-family-leave programs;
• state paid sick leave;
• state wage notices and pay-frequency requirements;
• state-specific overtime and meal/rest rules; and
• employer registration.

Fall 2026 action

Require advance approval before an employee changes their primary work state. HR should route location changes to payroll and benefits before the employee begins working there.

8. Grant-Funded Payroll and Labor Distribution: Build the Audit Trail at the Time of Payroll

For colleges and universities, payroll is often an accounting and grant-compliance system as much as it is an employee-payment system.

Common failure points include:

• wrong funding source or department code;
• salary charged after a grant period ends;
• effort split incorrectly across grants;
• retroactive payroll transfers without adequate support;
• fringe-benefit allocation errors; and
• payroll changes that do not reconcile with finance or sponsored-program records.

The best time to fix labor allocation is before payroll posts—not during an audit months later.

Fall 2026 action

Create exception reports for:

• employees with multiple funding sources;
• grant end dates approaching;
• labor-distribution percentages that do not total correctly;
• retroactive adjustments; and
• employees whose appointment or compensation changed after the original funding setup.

9. New-Hire Tax Withholding: Use Current 2026 Federal Tables and Forms

The IRS issued 2026 Publication 15 and Publication 15-T for employer withholding. Institutions should confirm payroll systems are using current 2026 tax tables and that electronic Form W-4 workflows meet IRS requirements.

New employees should use the current Form W-4, while valid pre-2020 Forms W-4 for existing employees generally remain in effect until the employee submits a replacement.

High-volume student and adjunct onboarding is a good time to audit whether local forms, state withholding elections, and payroll-system defaults are also current.

Fall 2026 Higher-Education Payroll Checklist

Before the semester reaches full speed, confirm:

• Adjunct FLSA classification and ACA hours-crediting are treated as separate analyses.
• Student FICA treatment is tied to enrollment/student status—not a simplistic hours-worked rule.
• FWS award limits and funding codes are reconciled with payroll, and federal work-study hours are excluded from ACA hours-of-service calculations where required.
• New York executive/administrative exemptions meet the correct 2026 state salary threshold and duties test.
• Bona fide teaching roles are evaluated under the correct FLSA teacher exemption.
• ACA measurement-period data includes employees with multiple assignments.
• The institution has decided how it will furnish 1095-C statements under current rules.
• I-9 processes are standardized across decentralized hiring units.
• Remote workers are registered and taxed correctly in the states where they work.
• Grant-funded payroll has exception reporting and documentation controls.
• 2026 federal and state withholding tables and onboarding forms are current.

Where TBM Payroll, PEO & HR Management Fits

Higher-ed payroll requires more than processing gross-to-net pay. It requires coordination among HR, finance, benefits, academic affairs, financial aid, sponsored programs, and department administrators.

Depending on the institution's service arrangement, TBM can support:

• complex payroll and earnings-code configuration;
• ACA tracking and reporting support;
• multi-state payroll processing;
• employee classification and HR guidance;
• student, adjunct, and variable-hour workforce setup;
• reporting for departments, grants, and labor allocations; and
• dedicated support for payroll and HR teams that need to resolve exceptions quickly.

The goal for fall payroll is not simply to get everyone paid on time. It is to make sure the data behind each payment is classified, taxed, funded, and documented correctly.