How the FLSA Overtime Rule Changes Will Impact Your Campus

Posted by Katie Brown on 27 October 2016 |

With the recent changes to the FLSA and overtime pay regulations, many employers are required to take action to ensure compliance. To meet the new overtime rules, many campus administrators and human resource departments must make adjustments to the salaries of affected campus employees.

On May 18, 2016, the Department of Labor (DOL) raised the minimum salary threshold from $23,660 to $47,476 per year, as part of its final decision on the Fair Labor Standards Act (FLSA) and overtime eligibility. In addition, minimum salary thresholds will increase automatically every three years to keep pace with inflation.

It’s expected that the new overtime rules will affect more than 4 million employees in the United States. Many of these affected employees, depending on the exemption status, may be working in higher-ed positions, such as campus administrators, coaches, athletic trainers, residence hall directors, post doctorate students and more.

Who Does FLSA Apply To?

According to the DOL, “Higher education employers, like other employers, are not required to pay minimum wages and overtime compensation to executive, administrative, and professional employees who satisfy the salary level and other requirements for one of the white collar exemptions.”

To determine if a campus employee is eligible for overtime compensation based on his or her exemption status, there are a series of tests you can run.

  • Salary Basis Test: Is the employee paid on a salary basis rather than hourly?
  • Salary Level Test: Does the employee have a minimum salary level that is equivalent to $47,476 annually?
  • Standard Duties Test: Does the employee’s primary job duty involve the work of exempt executive, administrative, or professional employees?

If an the answer is “yes” for each test, then the employee meets all compensation requirements according to the FLSA and DOL. In addition to the white collar exemptions, there are also specific administrative, executive and professional employee exemptions campuses should consider when reviewing their employees’ salary levels and grades.

How to Address Salary Changes for Campus Employees

For many campus employees—including executive, administrative and professional employees—the new FLSA regulations will not affect their current pay. However, it is likely there are campus employees who will need salary adjustments based on the requirements.

To ensure compliance with FLSA, campuses should review all employee salaries and pay grades. Based on findings, campuses can:

  1. Increase salaries to maintain employee exemption status
  2. Adjust employee wages to meet requirements
  3. Continue paying current salaries, as well as any overtime work past 40 hours
  4. Reorganize the workforce to adjust schedules and work allocation

What to Consider When Reviewing the Impact of FLSA

Campus administrators will have a variety of options when deciding how to address the FLSA regulations. However, to ensure compliance, campuses must review the current compensation and overtime wages of the entire campus workforce in order to make the best decisions for their organization.

To ensure FLSA compliance, campus administrators and HR departments must understand all facets of the regulation, including:

  • Job description development and adjustment
  • Employee classifications
  • Time tracking and reporting
  • Federal and state wage laws
  • Off-the-clock time calculations
  • How to handle complaints

For more information on the FLSA and best practices for educating campus administrators and employees, Campus Answers provides wage and hour training.

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