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FLSA Overtime Eligibility and Exemption



Frequently Asked Questions (FAQ's)

What is the Fair Labor Standards Act?

The Fair Labor Standards Act (or “FLSA”) is a federal regulation enforced by the U.S. Department of Labor (DOL) that requires the payment of overtime to employees who are considered non-exempt (hourly).  The regulations also contain requirements regarding exemption from overtime (salaried) with regards to the test that the position must meet to be exempt.

Why were the FLSA regulations modified?

In the opinion of the Department of Labor, the salary test was no longer effective because the salary level had not been modified to keep up with inflation.  

When does the University have to become compliant?

The University must be in compliance by December 1, 2016.

How does the University determine who is exempt (and thus, not entitled to overtime) under the Act?

The determination is based on the following tests:

  • Salary Basis – salary is not reduced for quality or quantity of work
  • Salary Test (as of December 1) – no less than $1,978.17 semi-monthly ($47,476 annually); cannot be prorated for part-time.  Exceptions to the salary level test are provided for employees who fall into specific categories – primarily teachers, doctors, lawyers, academic administrative personnel and outside sales. Those categories of employees do not need to meet the salary level test.
  • Duties Test – determined by Human Resources based on the job description on file and guidelines provided by the Department of Labor.

Who will be impacted by these changes?

All employees making between $23,660 (the old threshold) and $47,476 (the new threshold), who are currently classified as exempt and who do not fall within the teacher, doctor, lawyer exception will be affected.

What is overtime?

Overtime is paid to hourly employees at one and one-half times the non-exempt employee’s regular rate of 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.

I prefer compensatory time over paid overtime. Is that a possibility?

Yes, employees can receive compensatory time in lieu of overtime.  The compensatory time can then be used instead of utilizing accrued benefits for time off.  Any compensatory balances that remain at the time of retirement or resignation will be paid out to the employee.  Different provisions may apply to those positions that are collectively bargained. 

Is the FLSA designation of exempt (salaried) or non-exempt (hourly) final or can I appeal it?

The classification is a legal designation driven by federal regulations, it is final. Any questions should be directed to Human Resource Services.

Will the duties and expectations of my job change if I transition from exempt to non-exempt?

It is the intention that the actual job duties an employee performs will not change as a direct result of the updated regulations.   

Will my supervisor expect me to get the same amount of work done in 37.5 hours that used to take me over 37.5 hours?

There are options available that managers can consider to improve processes and increase efficiencies to minimize overtime costs. Managers are encouraged to reach out to the Human Resources for assistance.

Is a non-exempt (hourly) position still considered a professional position?

The designation of exempt or non-exempt is simply a legal designation under the FLSA and does not impact the type or importance of an employee's work.

What do I have to do to get approval to work overtime?

Compensatory time is also an option in lieu of overtime.   If you need to work more than 7.5 hours in the day or 37.5 hours in the week, then you need to speak with your supervisor in advance and get approval to work the extra hours. However, the regulations are very clear that if overtime is worked it must be paid according to legal requirements regardless of whether it was approved or not approved. Many departments require employees to not work overtime unless it has been approved in advance. Accordingly, even though unapproved overtime must be paid in order to comply with legal regulations, the department could also implement corresponding disciplinary action for the employee working overtime that was not authorized. 

How would my timekeeping change if I transition from exempt to non-exempt status?

The FLSA includes a recordkeeping requirement for non-exempt employees. Accordingly, non-exempt employees must maintain accurate daily records of time worked. Such records must document hours actually worked rather than hours scheduled to work.