Fair Labor Standards Act (FLSA) Overview

Fair Labor Standards Act (FLSA) Overview

The FLSA is a federal law originally enacted in 1938. Under the authority provided by the FLSA, the U.S. Department of Labor sets requirements like the minimum wage, overtime pay, recordkeeping, and standards for employing minors. For more information, visit the Department of Labor's webpage titled Compliance Assistance - Wages and the Fair Labor Standards Act (FLSA). The Montana University System complies with the provisions of the FLSA that are applicable to public employers and educational institutions.

The FLSA sets forth the categories of employees eligible and ineligible for overtime. Generally, with a few exceptions, employees who perform certain duties and who meet certain salary thresholds are exempt from overtime. Under the FLSA, employees who do not meet those requirements are eligible for overtime. The FLSA sets a 40-hour work week as the standard work week and requires the employer to pay at least 1.5 times a non-exempt (hourly) employee's regular pay for overtime hours.

Exempt (salaried) employees are not covered under the same requirement. If an exempt employee is required to work more than 40 hours in a week, the employee is not eligible for compensation other than their regular salary.

Currently, workers who do not meet the salary threshold are considered non-exempt (hourly) from the overtime provisions of the FLSA and therefore are paid 1.5 times regular pay for overtime hours.

In addition to meeting this minimum salary threshold, exempt workers must perform duties that would qualify them as either executive, administrative or professional employees as outlined in the FLSA.

The non-exempt employee will be:

1. Eligible for overtime pay for hours worked over the standard 40-hour work week or, if covered by a collective bargaining agreement, as stipulated by collective bargaining agreement.

2. Required to record overtime hours worked, according to specific campus procedures.

FAQs

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? The FLSA regulation ? Applying the duties tests to employees ? Impact on job duties and nature of work ? MUS policies and procedures

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The FLSA regulation

What is the Fair Labor Standards Act (FLSA)?

The Fair Labor Standards Act is a federal law that establishes the federal minimum wage, overtime pay, recordkeeping, and child labor standards. This law applies to employees that work in the private sector, or in federal, state, or local governments. The Wage and Hour Division of the U.S. Department of Labor administers and enforces the FLSA.

What is overtime?

Overtime pay is required by the FLSA for non-exempt workers for all hours worked in excess of 40 hours in a workweek. Overtime is paid at one and one-half times the non-exempt employee's regular rate of pay.

If your position is deemed to be non-exempt under FLSA regulations, then you will be eligible for overtime pay for hours worked over 40 hours in the work week. This depends upon the type of work performed, and the level of pay for that work. There are three tests for determining if the work qualifies for exemption from the overtime provisions of the law or not, and all these tests must be met:

1. The "salary-basis" test requires that an employee be compensated on a salary or fee basis.

2. The "salary level" test requires that an employee be paid above a certain threshold in order for the job to be considered exempt from overtime requirements.

3. The "primary duties test" compares the actual work performed with the criteria established by various tests for exemption under the FLSA.

The Human Resource Department is responsible for "duties testing" all positions.

Is the FLSA designation final or can I appeal it?

Because the classification is a legal designation driven by federal regulations, it is final. Any questions should be directed to the campus Human Resources department.

Can employees waive their right to be non-exempt (hourly)?

No, the classification is a legal designation that cannot be waived.

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What do the terms exempt (salaried) vs. non-exempt (hourly) mean?

These terms relate to the overtime provisions of the FLSA. If a job is FLSA exempt, that means it is exempt from the overtime provisions of the FLSA no matter how many hours are worked. If a job is non-exempt, it is eligible for overtime pay for any hours worked over 40 hours in the work week.

Which job titles are considered exempt?

The FLSA status is based on three tests, and is determined by the duties performed, not by the position title. The three tests, all of which must be met for the job to be exempt from overtime under the FLSA, are:

1. Salary basis test: must be paid on a salaried basis, not an hourly basis 2. Salary level test: must meet a minimum salary threshold 3. Job duties test: this is a complex assessment, with various categories, and the

assessment is based on the primary duties for the job being evaluated

Do all jobs with the same title have the same FLSA status?

Not necessarily under the new FLSA rules. It is the duties and individual salary level - not the titles - that would be considered in evaluating individual eligibility for overtime.

The FLSA Duties Test

The Department of Labor has provided more detailed guidance for Higher Education Institutions on paying overtime under the FLSA. This guidance on academic titles includes Postdoctoral Fellows, Teachers, Coaches, Adjunct Instructors, Academic Administrative Employees, Students (e.g. Graduate Teaching Assistants, Research Assistants and Residential Assistants).

Can part-time employees be classified as exempt?

Yes, as long as the employee meets the salary basis test, the salary level test and the duties test, the employee can be considered exempt under FLSA, regardless of FTE status or number of hours worked.

Can part-time employees' salaries be prorated in order to meet the salary minimum?

No. The salary level test states that employees must meet the salary threshold to be considered exempt. The minimum threshold stands as a baseline and must be met, regardless of FTE status or the number of hours worked per week.

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What if I cannot complete my job in 40 hours, will my performance evaluation suffer?

Performance evaluations should compare individual performance to a reasonable standard for the type of work performed.

Is a non-exempt job still considered a "professional" position?

"Professional" is not a formal designation within the MUS compensation system, though it is commonly used to refer to contracted employees. The designation of exempt or non-exempt is simply a legal designation. There have been, and will continue to be, a number of positions within the MUS Staff Compensation Plan that are exempt from overtime. Whether a position is determined to be classified or contracted will depend on the duties performed and the funding sources.

Under Board of Regents (BOR) Policy 711.1, certain "non-faculty professional and administrative employees who perform work that is autonomous in nature or involves policymaking authority" are eligible for MUS employment contracts. Not all positions exempt from overtime provisions receive MUS employment contracts; however, positions must meet the exemption criteria from the overtime regulations to be eligible for MUS employment contracts under the policy.

Campus Policies and Procedures

Overtime pay

What do I have to do to get approval to work overtime?

Employees may not work overtime unless approved in advance. If you believe you need to work more than 40 hours in the workweek, you will need to contact your supervisor in advance and get written approval to work the extra hours.

I am a supervisor. How do I approve overtime?

You would follow the guidelines established by your campus for approving overtime for nonexempt staff. If there are questions about how to proceed, contact your campus Human Resources office for further guidance and support.

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Some university jobs require 24/7 attention (e.g. care of animals) or working odd hours (e.g. coaching sports teams, recruiting, etc.). How does the university meet these needs?

This depends upon many factors including funding, etc. The department may choose to pay overtime to current employees, hire additional staff as required to get the work done, reorganize work, or rearrange schedules, or some combination of these approaches.

Can departments or supervisors choose to `look the other way' and ask non-exempt employees to work overtime without reporting the hours?

No. If employees are asked to work overtime and not record it, they should contact their campus Human Resources office. It is inappropriate and illegal for supervisors or departments to ask non-exempt employees to work without recording the time. Supervisors and departments can deny overtime requests or otherwise limit overtime; however, if the hours are worked they must be recorded and paid appropriately.

Can a department offer `comp time' instead of overtime pay?

Yes, departments may grant employees compensatory time off (i.e., "comp time") in lieu of immediate overtime pay at a rate of one and one-half hours for each hour of overtime worked. The agreement must be in writing and mutually agreeable to the employee and the university. Comp time earned under the agreement will be reported on the employee's time sheet. Supervisors may contact the campus Human Resources office for assistance with establishing a comp time arrangement.

Timekeeping

What are the timekeeping requirements for non-exempt employees?

The FLSA includes a recordkeeping requirement for non-exempt employees. Accordingly, nonexempt employees must maintain accurate records of overtime hours worked. Hours will be tracked in accordance with each campus's time keeping requirements.

How does travel time count as "hours worked"?

Under the FLSA a non-exempt employee must be paid for all hours the employee is "suffered or permitted to work." Under certain circumstances, time spent traveling is considered compensable (i.e. counted as hours worked). Time spent traveling is generally considered work time if it occurs during the course of the regular workday. Overnight travel is reviewed on a case by case basis to determine what time is compensable. The campuses will follow the guidance on travel time provided by the FLSA, the state labor department and any applicable Collective Bargaining Agreement.

Thanks to the University of Missouri System for allowing us to reference portions of their website content.

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