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FLSA Overtime Eligibility and Exemption

  

   

Employee Impact

If an employee makes less than $47,476 their position may change in one of three ways: transition from exempt (salaried) to non-exempt (hourly), stay exempt (salaried) because they meet one of the duties tests that does not have a required salaried threshold (teachers, doctors, lawyers, academic administrative personnel and outside sales), or stay salaried but be eligible for overtime (salaried non-exempt). 

The most obvious changes due to this transition would be the following:

  1. Requirement to track all hours worked
  2. Eligible for overtime pay.  For those employees on a 37.5 hour work week, overtime will need to be paid at a time and a half rate for all hours worked over 7.5 per day or 37.5 week.  For those employees on a 40 hour work week, overtime will need to be paid at a time and a half rate for all hours worked over 8 per day or 40 per week.
  3. Change in vacation benefit accrual rates for civil service employees moving from salaried to hourly.  The University has decided to grandfather the vacation accrual rate for those impacted employees for as long as they are in the position.  This means that the impacted employee will continue to earn vacation benefits at the salaried rate. 
  4. Employees moving from the salaried payroll to the hourly payroll will typically miss a paycheck.  The university has confirmed that it will implement a mitigation strategy that will ensure they do not miss a check.  Additional information will be provided at a later time. 

The updated regulations must be implemented by December 1, 2016.  This means that there is limited time for the university to be in compliance with the updated law.