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.
Adjunct faculty create two different compliance questions that are often mistakenly treated as one.
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 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.
Confirm that:
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.”
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.
For FWS and institutional student employment, confirm:
Do not rely on the employee type “student” by itself to determine tax treatment.
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.
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:
The duties test still matters. A title such as “coordinator,” “assistant director,” or “manager” does not make an employee exempt by itself.
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.
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:
Before fall activity peaks, review:
A department-by-department view is not sufficient if the employee works for the same ALE member across multiple assignments.
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.
Fall is a good time to decide whether the institution will:
Whichever method is chosen, payroll, benefits, HRIS, and employee communications should agree on the process before year-end reporting begins.
Fall onboarding can involve hundreds or thousands of I-9 transactions in a short period.
Institutions should review:
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.
Decentralized hiring is efficient, but it creates inconsistency. If departments complete their own I-9s, use standardized training, checklists, and periodic audits.
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:
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.
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:
The best time to fix labor allocation is before payroll posts—not during an audit months later.
Create exception reports for:
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.
Before the semester reaches full speed, confirm:
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:
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.