Fair Labor Standards Act Changes 2016
Brown Bag Information Sessions:
Employee eligibility for overtime pay is determined by regulations under the Fair Labor Standards Act (FLSA). Various tests of duties and salary threshold determine whether a position is considered “exempt” or “non-exempt,” which refers to whether the job is exempt from overtime pay or not. Employees in non-exempt positions must be paid for overtime worked and are generally required to report time worked more frequently and in more detail than those in exempt jobs.
The DOL has announced that they will revise the Fair Labor Standards Act (FLSA) effective December 1, 2016, raising the salary threshold required to qualify for exemption from overtime to $47,476 per year (an increase from the current $23,660 per year). This is a significant change which will impact, in some way, approximately 200 MSU Denver staff members, transitioning them from exempt status to non-exempt status (i.e. becoming overtime eligible). The new regulation also establishes a mechanism for automatically updating the salary and compensation levels every three years, beginning Jan. 1, 2020
Employees moving from exempt to non-exempt:
- Must report all hours worked
- Must be paid for all hours worked and receive overtime or comp time for time worked in excess of 40 hours in a workweek
It is very important to understand that this change in no way impacts the value of any staff member’s work or the importance of his/her contributions to MSU Denver. The university is responding to a change in federal law and is required to be in compliance. MSU Denver understands that this transition may be difficult for some employees and departments, and will offer several resources to help manage the change.
Compensatory time, referred to as comp time, is paid time off given to a non-exempt employee instead of overtime pay.
Rather than paying employees time and a half in overtime pay, the university may give paid time off from work, for the extra hours worked. Comp time must be paid at the same rate as overtime pay - one and one-half hours of compensatory time for each hour worked beyond 40 hours in a work week.
Communications will take place at the department level between supervisors, HR representatives and impacted individuals. This should include training on how to report time for any individuals in jobs being reclassified to non-exempt who may not have previously reported time worked. Information and details will be coming out in various forms during October and November as we move toward the December 1, 2016 effective date.
My annual salary is over $47,476, does that mean I am exempt and not eligible for overtime or compensatory time?
Even if your salary is over the $47,476 threshold you may still be eligible for overtime based on the FLSA duties test. In order to be exempt from the overtime provisions, a position must make more than $47,476 AND the core duties of the position must have a standard established by FLSA. Most administrative support, front line student support, and many other positions around the university will not qualify as exempt under the duties portion of the provision.
The new rules do not affect instructional faculty (Tenure Track, Category II or Affiliates).
---- For Managers and Supervisors
Yes. Salaried employees not subject to the salary threshold test include instructional faculty (including affiliates), some coaches, and select other types of positions which have been exempted from this under the FLSA.
Managers and supervisors may need to set new expectations and change department schedules or behaviors in order to manage hours worked within budgets. It is important to clearly communicate any new department standards or business processes to newly non-exempt employees, especially if their duties will not be changing. Considerations include:
- Expectation to seek approval for overtime
- Guidelines for using mobile devices outside of normal work hours to respond to calls or emails
- How to track and report time worked and exception time
- Adjustments to work schedules when work must occur outside of normal business hours
Communicating a clearly defined overtime approval process to your non-exempt employees can assist you in managing both time and budget resources. However, while non-exempt employees should seek pre-approval before working overtime, it is important to remember that all overtime/comp-time must be paid, whether pre-approved or not.
Yes. If overtime hours are worked by non-exempt employees, even if unapproved, they must be paid. Therefore, it’s important to establish overtime rules and communicate them to everyone in your department. The guidance for affected employees reiterates that they should seek approval before working any overtime, but you can help by establishing rules in your department for seeking approval in advance for projects or events that may be deadline driven and require additional hours. Since more employees may now be paid for overtime than may have previously been the case, supervisors will need to consider this impact when planning employee schedules and assigning work.
The employees in my department are used to having flexibility in their work hours. Can this continue if some or all of them become non-exempt?
Yes. Special or alternate scheduling is allowed within the same workweek. For example, if a typical schedule is 8 hours a day during the day, and the department needs an employee to work a special event for 4 hours during the evening. The schedule may be changed to give the employee 4 hours of time off at another time during the same workweek.
Yes. Supervisors can require overtime work when necessary and with compensation (comp time or overtime). Whenever possible, you should give advance notice to employees.
If I require evening work in my department for an event or other function, can I reduce a non-exempt staff member’s daytime hours and replace them with evening work as long as they don’t work more than 40 hours per week?
Yes, you can adjust the work hours of an employee to meet needs. Advance notice of such changes should be given to the employee if possible. You can rearrange hours from day to day within the same week, but the regulations do not provide you with the discretion to move hours from one week to the next without incurring overtime for the week in which the hours worked exceed 40 (even if the hours worked in the preceding week were less than 40).
Does time spent answering emails or using a mobile phone for work outside of normal hours count towards overtime for non-exempt employees?
For non-exempt employees who respond to emails or calls outside of normal work hours or while on lunch breaks on a “regular” basis, that time is counted as work time for overtime purposes. If a non-exempt person responds to emails or calls “very occasionally,” then court cases have considered that to be “de-minimis” and therefore not counted for overtime purposes. However, supervisors have discretion to establish overtime approval processes. If an employee continues to work overtime without supervisor approval, then the supervisor could begin taking possible disciplinary action with the employee.