Helping employees maximize their potential



Fair Labor Standards Act

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.

Fair Labor Standards Act Coverage

  • Minimum wage
  • Equal pay
  • Child labor
  • Overtime pay
  • Record-keeping

Types of Employees

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.

Non-Exempt Employees
Non-Exempt Employees

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
  • For all hours worked over 40 in a workweek, premium overtime is paid at the time-and-one-half rate.
  • Employees may be compensated by time off at the time-and-one-half rate by agreement with the employee.
  • Vacation and sick leave and compensatory time is recorded to the nearest one-quarter hour.
  • When an employee has exhausted all available accrued vacation and sick leave and compensatory time off, salary is reduced ("docked") in proportion to any absences from scheduled work time.
  • In cases of corrective action, suspension without pay for periods of less than one week will be permitted.
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.
Exempt Employees
Exempt Employees

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:

  • Paid an established monthly (or annual) salary
  • Paid for carrying out the duties of their position – regardless of how many hours worked
  • Exempt employees may work more or less than 40 hours per week and their pay does not change
  • They do not receive overtime nor compensatory time off
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.

  • Vacation and sick time must be charged in full-day increments (not hours or portions of a day).
  • When a full-time employee has exhausted all available accrued vacation and sick leave and previously accrued compensatory time off, salary will not be reduced ("docked") for absences of less than a full day.
  • Salary may not be reduced for absences of less than a full day.
  • In cases of corrective action, suspensions without pay will not be permitted for less than one full workweek, except in the case of suspension for infractions of safety rules of major significance.
  • Note:  Leave bank deductions shall be made for any hours or partial hours taken by an exempt employee who elects or is required to substitute paid leave for unpaid family and medical leave taken on an intermittent basis or reduced schedule.  (Refer to PPSM-2.210: Absence from Work)