2016 FLSA Update and Implementation

FLSA Implementation UPDATE – As a result of the Nov. 22 injunction that temporarily delayed implementation of the 2016 FLSA regulations, UA employees identified as Professional Nonexempt will not begin tracking their time on Thursday, Dec. 1.  Human Resources will continue to monitor the situation and will communicate with employees and their supervisors when the issue is resolved. If you have questions, please contact the HR Service Center.

This information is intended to help UA employees and supervisors transition to the FLSA standards updated by the U.S. Department of Labor in May 2016. Supervisors should work with their area’s fiscal officer(s) and leadership to determine how to meet university needs and operational requirements when scheduling and tracking employees’ work hours.  

Please note: This website will be updated as additional information becomes available

Key Changes | Definitions| General Guidelines |Frequently Asked Questions 

Introduction

  • The Fair Labor Standards Act (FLSA) is a federal law that establishes minimum wage, overtime pay eligibility and recordkeeping requirements for employees in the private sector and in federal, state and local governments.
  • The Department of Labor (DOL) relies on a salary level and other factors to determine which employees are protected by the FLSA’s minimum wage and overtime regulations (referred to as nonexempt employees), and which employees are exempt from the minimum wage and overtime regulations. The Department has updated the salary level requirements seven times since 1938.
  • In March 2014, President Obama directed the DOL to update the salary level requirement that had been in place since 2004. The DOL announced an updated salary level requirement for full-time employees in May 2016.
  • According to the updated regulations, full-time employees whose annual base salary is less than $47,476 a year or $913 a week are now classified as nonexempt employees who are subject to the updated FLSA regulations governing overtime and recordkeeping.
  • The updated regulations become effective Dec. 1, 2016.
  • Approximately 600 UA employees who were previously classified as exempt are covered by the updated regulations.
  • The FLSA regulations include some exceptions that allow employees making below the salary level to be classified as exempt. Examples include teachers, lawyers and doctors. Students who are employed by UA as Graduate Teaching Assistants, Graduate Research Assistants and Resident Advisors are also exempt from FLSA regulations. Human Resources has carefully evaluated all positions that fall below the updated FLSA salary guidelines.

 

 Key Changes

  • Based on the DOL’s updated salary level, UA employees whose annual base salary falls below $47,476 a year or $913 a week are now subject to the 2016 updated FLSA regulations governing overtime and recordkeeping. UA has designated these employees, who were previously classified as exempt, as Professional NonExempt employees.
  • Professional NonExempt employees who stay in their current positions will continue to receive retirement benefits and accrue annual and sick leave at the same rate they did when they were classified as exempt.
  • Following FLSA regulations, Professional NonExempt employees must record all hours worked, including overtime. These employees will use UA-eTime to record hours worked.


 

Definitions (PDF)

  • FLSA (Fair Labor Standards Act): The federal law that establishes minimum wage, overtime pay eligibility and recordkeeping requirements for employees in the private sector and in federal, state and local governments. Under FLSA regulations, some employees are designated as exempt from overtime payments and recordkeeping regulations, and others are designated as nonexempt and are subject to overtime payments and recordkeeping regulations
  • Exempt:  Employees who are excluded from regulations governing overtime payments and recordkeeping requirements.
  • Nonexempt: Employees who are paid hourly and must record the hours they work. Nonexempt employees who work more than 40 hours in one workweek must be compensated, either through overtime pay or compensatory time.
  • Professional Nonexempt: UA employees who moved from exempt to nonexempt status as a result of the updated 2016 FLSA regulations. These employees will continue to be paid monthly and will continue to receive the same retirement benefits and accrue annual and sick leave at the same rate they did when they were classified as exempt employees. However, they must now record all hours worked using UA-eTime. Professional Nonexempt employees who work more than 40 hours in one workweek must be compensated, either through overtime pay or compensatory time.
  • Overtime: Hours worked over 40 in one workweek by a nonexempt employee.
  • Overtime pay: The practice of paying nonexempt employees one-and-one-half times their hourly pay for hours worked over 40 in one workweek. Hourly pay is determined by dividing annual base salary by annual regularly scheduled work hours.
  • Compensatory time (Comp time):  Overtime that is recorded as time off in lieu of payment for overtime hours worked. Compensatory time is accrued at the rate of one-and-one-half hours for each hour worked over 40 in one workweek.
  • Alternate scheduling:  Allows the supervisor to alter an employee’s start and finish times for days worked during the workweek.
  • Call-out:  Occurs when employees are called back to work after their regularly scheduled hours or on their days off.
  • One-and-a-half:  Also referred to as time-and-one-half. When nonexempt employees work more than 40 hours in one workweek, overtime pay is calculated at one-and-one-half times the employee’s hourly pay.
  • Hourly pay:  Determined by dividing annual base salary by annual regularly scheduled work hours.
  • Hours worked: The FLSA requires overtime pay for hours worked over 40 in one workweek. When calculating overtime, UA’s overtime policy does not include annual leave, sick leave, jury duty, FMLA, etc.
  • Annual base salary: Annual base salary is defined as pay for the employee’s primary position/job only. It does not include additional pay such as supplemental pay, second assignment pay, etc.
  • Workweek: A workweek is the unit of time used to determine wages due to employees. One workweek is defined as a regularly recurring period of 168 hours, which equates to seven consecutive 24-hour periods. UA’s workweek starts at 12 a.m. Sunday and ends at 11:59 p.m. Saturday.
  • Annual leave:  Also referred to as vacation.

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General Guidelines (PDF)

While these are general guidelines, each department will establish specific guidelines for its employees.

Budgeting

Supervisors should work with their designated fiscal officer(s) and departmental leadership to determine how overtime hours and costs will be managed for their areas.

 

Determining and paying overtime

Professional Nonexempt employees must be compensated for hours worked in excess of 40 hours in one workweek. Professional Nonexempt employees who work more than 40 hours during one workweek can:

– be paid at the overtime rate of one-and-one-half times their hourly pay

 OR

– accrue compensatory time off at the rate of one-and-one-half hours for each hour worked over 40 in one workweek. Employees may not accrue more than 240 hours of compensatory time. Prior to the performance of work, the supervisor and the employee must agree that compensatory time will be granted instead of cash compensation. Such an agreement must be entered into voluntarily by the employee.

Pay schedule for overtime hours

Professional Nonexempt employees will continue to be paid on a monthly basis. They will be paid for overtime hours based on this overtime pay schedule. The monthly paycheck will reflect only those hours recorded in UA-eTime.

 

Scheduling

Supervisors are responsible for establishing and approving changes in employee work schedules. Supervisors have several options that can help them manage overtime and meet the needs of the university and its employees.

Alternate schedules: Supervisors can adjust a Professional Nonexempt employee’s work schedule using a variety of options, including the following:

  • on a daily or weekly basis.
  • during the workweek if the employee has already worked 40 hours in one workweek.

Compensatory time (Comp time): University departments can allow Professional Nonexempt employees to accrue compensatory time in lieu of pay for overtime hours.

  • Prior to the performance of work, the supervisor and the employee must agree that compensatory time will be granted instead of cash compensation. Such an agreement must be entered into voluntarily by the employee.
  • Compensatory time is accrued at the overtime rate of one-and-one-half hours for each hour worked over 40 in one workweek. Comp time will be reported in the leave accrual section of the employee’s pay stub.
  • Employees may not accrue more than 240 hours of compensatory time.
  • Guidelines for using UA-eTime to convert overtime to compensatory time can be found online at  http://payroll.ua.edu/documents/Time_and_Attendance_Convert_Overtime_to_Comp_Time_Earned.pdf.
  • View Human Resource’s policy 602.00 Overtime and Compensatory Time for Nonexempt Employees.

 

Recordkeeping

Professional Nonexempt employees are required to record hours worked using UA-eTime.  When a Professional Nonexempt employee does not have access to the online system, the supervisor will record the employee’s time in UA-eTime. The monthly paycheck will reflect only those hours recorded in UA-eTime.

Approvers must review and approve the submitted time at the end of each biweekly pay period: http://payroll.ua.edu/payrollschedule.html. Failing to approve employees’ submitted time may result in employees not being paid in a timely manner.

The Payroll Office will send email reminders to time approvers regarding the due dates for time approval. Resources for using UA-eTime can be found online at http://payroll.ua.edu/forms_guides.html#time.

In all instances, Professional Nonexempt employees must be compensated for all hours worked, including overtime. Disciplinary action may be taken if an employee fails to adhere to overtime and compensatory time guidelines.

Specific questions regarding the completion of time records for Professional Nonexempt employees should be directed to the HR Service Center. The Payroll Office is responsible for making the final determination on how to accurately record hours worked. Contact information for specific payroll functions can be found online at http://payroll.ua.edu/contact.

 

Accruing Annual and Sick Leave

Professional Nonexempt employees who stay in their current positions will continue to accrue annual and sick leave at the same rate they did when they were classified as exempt employees. View the Professional Nonexempt Benefits Matrix. 

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Frequently Asked Questions (PDF)  

 

Benefits 

How do the updated regulations impact annual and sick leave for Professional Nonexempt employees?

Professional Nonexempt employees who stay in their current positions will continue to accrue annual and sick leave at the same rate they did when they were classified as exempt employees. View the Professional Nonexempt Benefits Matrix for more details. 

How do the updated regulations impact retirement benefits for Professional Nonexempt employees?

Teachers’ Retirement System benefits are not impacted in any way by the updated FLSA regulations.   Professional Nonexempt employees who stay in their current positions will continue to be eligible for the same 403(b) matching contributions they did when they were classified as exempt employees. View the Professional Nonexempt Benefits Matrix for more details. 

Do the updated FLSA regulations impact employees’ football tickets?

Professional Nonexempt employees who stay in their current positions will continue to be able to purchase football tickets the same way they did when they were classified as exempt employees. 

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Implementation/New Hires 

Do these changes apply to all full-time employees who make less than $47,476 a year or $913 a week?

The FLSA regulations include some exceptions that allow employees making below the salary level to be classified as exempt. Examples include teachers, lawyers and doctors. Human Resources has carefully evaluated all positions that fall below the updated FLSA salary guidelines.

Do these changes apply to students?

Students who are employed by UA as Graduate Teaching Assistants, Graduate Research Assistants and Resident Advisors are exempt from FLSA regulations. Other student employees are already considered hourly employees.

Will the titles of Professional Nonexempt employees change? ­­­

Efforts will be made to maintain current job classifications (titles); however, there may be some situations where changes are necessary.

Can employees or supervisors choose whether positions are classified as exempt or Professional Nonexempt?

No. HR makes those decisions based on FLSA regulations.

How many UA employees are covered by the updated FLSA regulations?  

Approximately 600 UA employees may be covered by the updated 2016 FLSA guidelines.

Will the 2016 FLSA regulations impact the number of hours Professional Nonexempt employees work per week?

Supervisors should work with their designated fiscal officer(s) and departmental leadership to determine how overtime hours and costs will be managed for their areas.

Will Professional Nonexempt employees still be paid monthly?

Yes. Professional Nonexempt employees will continue to be paid on a monthly basis but will have to record their hours worked using UA-eTime. The monthly paycheck will reflect only those hours recorded in UA-eTime.

How is hourly pay determined?

Hourly pay is determined by dividing annual base salary by annual regularly scheduled work hours.

Will departments increase budgets to pay overtime costs?

Each department will determine how overtime costs will be met.

Can Professional Nonexempt employees attend professional conferences?

Yes. Professional Nonexempt employees may still attend conferences. However, supervisors should become familiar with the University’s travel policies to ensure employees are compensated appropriately.

In addition to their primary job at UA, can Professional Nonexempt employees work a second job within another UA department?

Professional Nonexempt employees who work a second job within UA that is classified as nonexempt must record those hours and be compensated accordingly. Professional Nonexempt employees should discuss budget and overtime compensation with the supervisors in both positions prior to work being performed.

Can I hire new employees as Professional Nonexempt? 

No. This classification is reserved for UA employees who moved from exempt to nonexempt status because of the updated 2016 FLSA regulations.

Will covered employees be able to submit their November monthly leave report as usual and approvers approve the leave? 

Yes, covered employees will be able to submit November leave until Dec. 7, 2016.

If an employee holds more than one job, can the employee have more than one FLSA status designation?

No, exemption status is determined by the primary duty.  Regardless of how many jobs an employee holds, the employee’s status must be either exempt or nonexempt.  For example:  Employee X, whose salary for their full-time assignment is below the minimum salary threshold, holds a supplemental instructional position as an adjunct/instructor.  If Employee X’s primary duty is nonexempt, all other assignments will be considered nonexempt and must be paid on an hourly basis.  The hours worked under the additional assignment will count towards hours worked in a workweek and will be paid at an overtime rate of time and one half if all hours worked in the week exceed 40.

 

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Overtime

Are Professional Nonexempt employees eligible for overtime pay if they work more than 40 hours in one workweek?

Yes. Professional Nonexempt employees must be compensated for all hours worked, including overtime.

Can Professional Nonexempt employees continue to check and respond to work concerns using their electronic devices after their regularly scheduled hours? Does this qualify as overtime?

With the approval of their supervisors, Professional Nonexempt employees can use their electronic devices for work purposes after their regularly scheduled hours. Professional Nonexempt employees should be compensated for all hours worked, including overtime. Disciplinary action may be taken if an employee fails to adhere to overtime and compensatory time guidelines.

When will overtime be included in the employee’s paycheck?

Hours worked over 40 in one workweek must be submitted and approved according to the following pay schedule: http://payroll.ua.edu/payrollschedule.htm. Professional Nonexempt employees will be paid for overtime based on this schedule.   

Does overtime have to be authorized by a supervisor?

Yes. The supervisor is responsible for establishing and communicating work schedules that meet the needs of the university and that manage overtime. While overtime should be approved by the supervisor prior to the work being performed, employees must be paid for all hours worked.

Can employees work beyond their regularly scheduled hours or do work at home without prior approval?

Supervisors are responsible for making sure that work is not performed beyond scheduled hours without prior approval. Employees who work without authorization or prior permission must be compensated in accordance with FLSA regulations. Supervisors who have questions about this process should contact their HR Partners.

Can Professional Nonexempt employees volunteer to work more than 40 hours in a workweek and choose not to be compensated?

No. Professional Nonexempt employees cannot waive their rights under the FLSA regulations.

Can Professional Nonexempt employees report to work early and stay late? 

Supervisors are responsible for establishing and communicating work schedules that meet the needs of the university and that manage overtime.

Can an employee work through lunch and then leave early to avoid taking annual leave?  

Supervisors are responsible for establishing and communicating work schedules that meet the needs of the university and that manage overtime.

Can Professional Nonexempt employees work through lunch and count that as overtime?

No. Professional Nonexempt employees cannot use the lunch hour as an overtime option.

My regular work schedule is 38.75 hours.  Will I be paid overtime for any hours worked over 38.75?

No.  All time worked beyond 40 in a work week are paid at the overtime rate.  Time worked between 38.75 and 40 will be paid at your regular rate of pay.  Time worked between 38.75 and 40 cannot be compensated as comp time and must be paid.

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Supervisors / Scheduling Overtime

Are supervisors responsible for making sure that Professional Nonexempt employees keep up with the timekeeping requirements and are paid for overtime hours?

Supervisors have direct responsibility for managing staff and ensuring compliance with policy and practices. UA-eTime approvers and timekeepers also share responsibility with supervisors for making sure Professional Nonexempt staff promptly and accurately record their hours worked.

What can a supervisor do if an employee consistently works from home without prior approval?

Professional Nonexempt employees are required to report hours worked outside their regularly scheduled workweek to their supervisors. Disciplinary action may be taken if an employee fails to adhere to overtime and compensatory time guidelines. Contact your HR Partner for more information. In all instances, Professional Nonexempt employees should be compensated for all hours worked, including overtime.

What happens if the job requires consistent overtime to meet deadlines? 

Supervisors should work with their designated fiscal officer(s) and departmental leadership to determine how overtime hours and costs will be managed for their areas.

 

For additional information about the Fair Labor Standards Act click here. 

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Last updated: August 25, 2016