Fair Labor Standards Act
What is it
The Fair Labor Standards Act (FLSA) is Federal law, dating back over half a century, that establishes certain minimum standards for wages, premium overtime, and other employment conditions. The FLSA did not apply to the University (i.e., we were not a "covered employer") until 1967 when amendments extended coverage to various government-related agencies. That coverage lasted only a few years before the Supreme Court decision voided the amendments. The coverage was finally re-established in 1985 through another Supreme Court decision and further Congressional action.
The FLSA regulates whether an employee is overtime-eligible ("non-exempt") or overtime-exempt ("exempt"). One of the requirements of the FLSA is for an employer to determine the exemption status of each employee. Beginning December 1, 2016, to qualify for FLSA exempt status, the FLSA rule requires that an employee earn no less than $913 per week, or $47,476 per year.
Resources When Changing FLSA Status
Because hourly non-exempt staff are paid on bi-weekly basis, and salary exempt staff are paid on a monthly basis, a change of FLSA status means a change in pay cycles. The following resources have been prepared to assist employees during this transition. A one-week gap in income is not uncommon due to the payroll processing times for the different pay cycles.
Exempt employees are not covered by (or are “exempt” from) the FLSA’s regulations pertaining to overtime. Four major exemption categories have been established and defined by the Act. They are "executive," "administrative," "professional" and “outside sales.” To be determined exempt under one of these categories, the employee’s position must meet certain criteria relating to their job responsibilities.
Exempt employees are:
Compensation Provisions for Exempt Employees
Due to the “salary” nature of the position, consult your HR expert before you consider reducing the pay of an exempt employee.
Non-exempt employees are covered by the minimum wage and overtime provisions of the FLSA and are required to account for time worked as well as use of sick, vacation, and other leave time to the nearest one-quarter hour. The FLSA requires that these employees be compensated for qualified overtime hours at the premium (time-and-one-half) rate.
Compensation Provisions for Non-Exempt Employees
Compensatory Time Off for Non-Represented Employees
The University compensates for overtime worked either in the form of compensatory time off or with pay, at management discretion, as a condition of employment.
Overtime Provisions for Represented Employees
Refer to the bargaining union contract for any covered employee. The contract may provide specific rules for compensating overtime.