Overview: Fair Labor Standards Act (FLSA)

What’s Next

NSU began tracking modifications to the federal Fair Labor Standards Act (FLSA). We want to make you aware of changes to the overtime eligibility rules, and how they impacted NSU. These changes were effective December 1, 2016. NSU began the transition on November 20, 2016, which was the first day of a new pay period. The pay date for the first bi-weekly check was December 16, 2016.

To provide employees with information about the changes, and how they affected you, Human Resources prepared an overview, and shared as implementation plans were finalized.

The transition team identified “who” will be impacted under the new minimum salary threshold, and this information was communicated to the employee, supervisor and appropriate Vice President during the first week of October, 2016. Employees who fell under the $47,476 started planning with their supervisors. NSU recommended tracking hours worked, and discussing how work may need to be accomplished differently upon being classified as non-exempt, hourly, and eligible for comp time. 

The first Bi-weekly pay period began November 20, 2016. Timekeeping also began on this day.

Pay Schedule: Monthly to Bi-Weekly for Pay and Insurance Deductions

Pay Date Pay Period Information
11/30/16 11/1 – 11/30 Last full (exempt) monthly check.
Employees who are eligible will receive stipend this pay period.
11/20/16 Will begin clocking hours in Banner
12/16/16 To ensure payment of total yearly salary an increase adjustment of 13.25 administrative leave hours will be added to the BW 25 pay period.  SAMPLE of moving from monthly to bi-weekly pay.pdf
12/2/16 Reduced benefits deductions begins.
No health, dental or vision will be deducted during the month of December.
12/16/16 11/20 – 12/3 1st full non-exempt hourly check – BW25
12/30/16 12/4 – 12/17 Regular, routine paycheck of hours worked and/or paid leave
1/13/17 12/18 – 12/31 Regular, routine paycheck of hours worked and/or paid leave


What is FLSA?

The Federal law that sets minimum wage, overtime, recordkeeping, and youth employment standards is governed by the Department of Labor (DOL). Read the Compliance Assistance - Wages and the Fair Labor Standards Act (FLSA).

The overtime part of the Act includes the “white collar exemption” tests that determine whether someone is considered “exempt” (salaried, and exempt from overtime), or “nonexempt” (hourly, and eligible for overtime). This is the piece of the FLSA that is changing.

exempt or non-exempt

Employees are classified as either exempt or non-exempt depending on their salary and the type of work they do. The FLSA establishes a minimum salary level in order to be exempt from overtime. The current salary minimum is $23,660 per year ($455 per week). Employees who earn more than $23,660 may be exempt from the FLSA overtime regulations if their primary job duties meet a “duties test” as defined by the Department of Labor. 

Positions that are exempt are not required to record and track hours worked. Non-exempt positions require an employee to record and track all hours worked, and any time worked in excess of 40 hours in a workweek (Saturday, 12:01 am-Sunday 12 am) will need to be paid as comp time at time and a half.

important changes

The featured change in the final DOL rules is an increase in the salary minimum of weekly earnings for full-time salaried workers, based on Bureau of Labor Statistics data. This raises the salary threshold for exempt status from $23,660 per year ($455 per week) to $47,476 per year ($913 per week). The DOL is looking to update the salary minimum every three years. This will require NSU to conduct assessments based on any new salary minimum, and make necessary adjustments to ensure employees are properly classified exempt or non-exempt.

effects

Based on the new rule, as many as 150 currently exempt NSU employees will have their jobs’ FLSA exemption status designations changed from Exempt (salaried, paid monthly) to Non-exempt (hourly, paid bi-weekly). As a result, impacted employees will be required to accurately record their daily working time and will have the right to overtime, compensated as compensatory time (comp time) at a rate of 1 ½ hours (time and a half) for each and every hour worked in excess of 40 in the designated workweek.

Transitioning from monthly, salaried, where pay is currently (at the end of the month) to hourly, biweekly, will result in a two week pay lag (pay period ends on a Saturday, and bi-weekly pay is received on the Friday two weeks later). For instance, Bi-weekly pay period 25 (BW25) is for the working dates of 11/20/16 to 12/3/16 but will not pay until 12/16/16.

Regardless of when a transition from exempt, salaried to non-exempt, hourly occurs, all pay is received. It is the timing of the transition that can be disruptive. This is why we are attempting to give as much notice as possible to those employees who may be switching to non-exempt (hourly) as a result of the FLSA change, to give as much time as possible to plan. Impacted employees should take some time to examine their personal finances and plan to budget within the bi-weekly payroll cycles.

While the new rules require final implementation by December 1, 2016, we are implementing the transition in November. We are diligently working towards creative solutions to best serve employees. Our goal is to help minimize any negative impact the timing may cause, as impacted employees adjust to 26 paychecks per year instead of 12. Human Resources, Payroll Services, Budgets and Accounting, Academic Affairs, and Student Affairs are working together as NSU transitions.

Contact

For more information contact:

Human Resources

humanresources@ nsuok.edu.