FLSA Changes for 2016 (Delayed)

FLSA Changes Delayed

Late yesterday, a U.S. District Court judge issued a preliminary injunction delaying the implementation of the Department of Labor’s changes to the Fair Labor Standards Act’s overtime rule, which was to become effective on December 1, 2016.  Accordingly, at this time we will not make any changes to employee classification, benefits, or eligibility for overtime.

Human Resources will continue to monitor the status of this case and will keep the University community informed of any changes. 

Background

The Fair Labor Standards (FLSA) is a federal law that establishes the minimum wage, sets guidelines for determining eligibility for overtime pay, and sets standards for recordkeeping for all employees.  In 2014, President Obama directed the Department of Labor (DOL) to review certain provisions of the FLSA, including the minimum salary level used to determine exemption from overtime requirements.  On May 18, 2016, the DOL issued a Final Rule which significantly increased the salary threshold, automatically extending overtime pay protections to millions of workers.

Key Factors of the Final Rule

  • Increases the minimum salary threshold from $455/week or $23,660 annually to $913/week, or $47,476.
  • Automatically updates the salary threshold every three years beginning in 2020.
  • Updated regulations become effective December 1, 2016.
  • Includes special exemptions for teachers, lawyers, doctors and certain academic administrative employees.

Impact to UAH

  • Approximately 160 UAH employees who were previously classified as exempt are covered by the updated regulations.
  • UAH employees whose annual base salary falls below $47,476 (or $913/week) may now be reclassified as non-exempt and will be eligible for overtime.
  • The University has revised its overtime policy to allow non-exempt employees to accrue up to 240 hours of compensatory, earned at the rate of 1.5 hours for every hour worked.
  • Professionals who are eligible for overtime will continue to receive 403(b) retirement plan matching benefits and will accrue annual leave at the same rate they did when there were classified as exempt.
  • Changes for affected UAH employees will be effective November 23, 2016.

Resources

FAQs

FLSA Training: Managers and Supervisors

Overtime Final Rule

Overtime Final Rule and Higher Education

Overtime and Compensatory Time Policy (Interim)

On-call and Call Back for Non-Exempt Employees Policy (Interim)