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The President recently sent out a letter regarding changes in the Fair Labor Standards Act (FLSA). In addition to the information provided in the letter, answers to the following FAQ’s have been prepared.
1. What is the Fair Labor Standards Act (FLSA)?
The Fair Labor Standards Act (FLSA) is a federal law that establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. It is administered by the U.S. Department of Labor (DOL). Under the FLSA employees are considered either “exempt” or “non-exempt”.
2. What is the difference between “exempt” and “non-exempt” employees?
“Exempt” employees are paid on a salary basis and meet the minimum salary threshold requirement set by the DOL. Exempt employees are usually not required to log the number of hours they work and are paid the same amount no matter how many hours they work. “Non-exempt” employees are compensated on an hourly basis and are required to record all hours worked. They are eligible for overtime pay on all hours worked in excess of 40 in one work week.
3. What is changing?
The DOL has recently announced changes to rules regarding how employees are classified under the FLSA. The minimum salary threshold in which a person can be considered exempt from overtime requirements will be increasing to $47,476 annually/$913 weekly. The current salary threshold is $23,660 annually/$455 weekly. The new rule will take effect December 1, 2016.
4. Who does this rule change affect?
There are three tests to determine if someone is exempt: salary threshold, job duties and paid on a salary basis. Employees whose positions no longer meet all three of these tests may be reclassified as non-exempt. Links providing more information about exemption criteria are included under the “Where can I find more information?” tab.
5. When will impacted employees be notified?
Starting in August impacted employees will be meeting with their supervisor and the Director of Human Resources to discuss the changes.
6. What does this change mean for employees who are affected?
Salaried employees are currently paid monthly. Employees whose status is changed from “exempt” to “non-exempt” should expect to start logging all hours worked and be paid on the bi-weekly payroll. Discrepancies in benefits are being reviewed. We have no intention for anyone to see a reduction in their current allotment of vacation days or other benefits because of the change in the FLSA act.
7. Where can I find more information?
More information can be found at the following links:
DOL Final Decision Announcement - https://www.dol.gov/whd/overtime/final2016/
Information specific to Higher Education Institutions (includes info about additional exemption criteria and the reason most higher ed employees won’t be affected) - https://www.dol.gov/sites/default/files/overtime-highereducation2.pdf
(More in-depth version of the preceding link) - https://www.dol.gov/whd/overtime/final2016/highered-guidance.pdf
Effects the new FLSA rule will have on Postdoctoral Research positions - https://nexus.od.nih.gov/all/2016/05/18/nih-flsa-2016/
http://www.huffingtonpost.com/francis-s-collins-md-phd/fair-pay-for-postdocs-why_b_10011066.html
If you have additional questions please contact Gail Ulrich in the Human Resource Office.