To: All University Colleagues
From: The Division of Human Resources
Date: May 19, 2016
Re: Fair Labor Standards Act (FLSA) Regulatory Changes
Earlier this week the Department of Labor (DOL) made its long-awaited announcement of the final Fair Labor Standards Act (FLSA) regulatory changes. This message briefly summarizes the changes and describes next steps in the University’s implementation plan.
What has changed?
- The minimum salary threshold for individuals to be exempt from overtime will increase from $455 per week to $913 per week ($22.83 per hour).1, 2
- The total annual compensation requirement for highly compensated employees will increase from $100,000 to $134,004.1
1Must be implemented prior to December 1, 2016.
2The minimum salary threshold will be automatically updated every three years to remain at the 40th percentile of the overall labor market.
Note: Faculty members whose duties consist primarily of teaching and attorneys and physicians will remain in an exempt status under the FLSA. The new regulations may allow some exemptions for coaches and “academic administrative personnel” who provide instruction or interact with students outside of the classroom. More guidance on these exemptions will be forthcoming.
What does this mean for employees?
- Most employees whose average weekly earnings are less than $913 at the time of implementation, based on either full or part-time equivalency, will be automatically converted to non-exempt, hourly employees.
- Impacted employees must then begin to track and positively report all hours worked.
- If hours worked exceed 40 in a week, overtime or compensatory time must be earned.
- Appointed employees who become non-exempt under the new regulations will remain appointed and receive a revised notice of appointment with an hourly rate of pay.
What does this mean for supervisors?
- Supervisors are encouraged to work with their department business officers and designated Human Resource Consultants to understand the impacts to their staff and evaluate available options.
What does this mean for departments?
- Department business managers should work in conjunction with local leadership to determine the financial and human capital impact within their areas.
- Guidance on how and whether to adjust pay for those who regularly work more than 40 hours a week will be provided shortly.
- As a first step in implementing the new overtime rules, departments may run a report of their affected employees within UAccess Analytics by following this path Dashboards > Employee > Workforce and selecting the “FLSA Impact Report” tab.
What are the next steps?
A Fair Labor Standard Act Task Force composed of members from Human Resources, Office of the General Counsel, Office of the Provost, Financial Services Office, Payroll, Systems Control, and the Budget Office has been meeting for several months and will partner with University departments to implement the new requirements. You can expect further communications through a multitude of channels, including live training and Q&A sessions, email, and updates to the FLSA implementation website. In the meantime, please direct your questions to your designated HR Consultant, or email them to firstname.lastname@example.org.