What is Fair Labor Standards Act – FLSA ?

Q: What is the FLSA?

A: FSLA is a federal law administered by the U.S. Department of Labor. The act establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in federal, state, and local governments. It also establishes threshold requirements that must be present before a position can be “exempt” from the requirement to pay overtime. One of these requirements is the position must pay above a minimum annual salary amount.

Q: Who is entitled to overtime pay under federal law?

A. Most non-exempt employees covered by the Fair Labor Standards Act (“FLSA”) must be paid at least 1.5 times their regular rate of pay for any hours beyond 40 in a workweek. Please note that time off hours, other than designated or discretionary holidays, do not contribute to overtime hours.

Q: What is being changed as a result of the new regulations?

A: As a result of the Department of Labor’s announcement regarding updates to the Fair Labor Standards Act (FLSA), the following changes will be made:

  • Increasing the FLSA “salary test” threshold increases the minimum salary threshold at which a position may be considered “exempt” from overtime pay from $23,660 per year to $35,568 per year.
  • Any staff member paid below $35,568 (regardless of job duties) would transition to non-exempt status and be eligible for overtime pay once the change takes effect on Jan. 1, 2020.

Q: Why is the salary threshold change being made?

A: The salary threshold was last changed in 2004 and has not kept pace with the increase in wages. The change was proposed as a means to raise pay for workers by increasing their salary or making more people eligible for overtime pay.

Q: Can I opt out of this change?

A: No. This change is mandated by the U.S. Department of Labor in accordance with federal law. It applies to all employers and employees covered by the Fair Labor Standards Act.

Q: How many employees at Duke will become newly eligible for overtime?  

A: Based on early calculations, Duke initially estimated the change could affect about 100 employees.

Q: Will my job responsibilities or role change as a result of being reclassified to a non-exempt position?

A: Your responsibilities as defined by your job description will not change as a result of being classified into a non-exempt position. However, your department may choose to modify your work hours or participation in work-related activities beyond a normal 40-hour workweek in consideration of potential budget impacts related to managing overtime pay.

Q: Is being classified in a non-exempt position a demotion?

A: No. The reclassification will not affect your base rate of pay, job title, job level, or role as described in your job description. A position’s classification as exempt or non-exempt basically determines whether you are eligible for overtime pay and how you record your time worked.

Q: Will this change how I record my work time?

  • Yes, you will need to submit a timecard every two weeks to record the hours you work and the hours you take as paid time off.
  • Depending upon your departmental business processes, you will submit this time either electronically through the [email protected] self-service website or through the time and attendance system. Time is submitted on a biweekly basis for supervisor approval.
  • If you are approved to work overtime, you receive 1.5 times your regular rate of pay for any hours you work beyond 40 in a workweek.
  • You will need to request approval in advance for working any overtime hours.
  • The frequency of pay will change from monthly to biweekly.
  • Deductions are taken from different cycles, i.e., dental insurance is deducted from the first biweekly check of the month and health insurance is deducted from the second biweekly check of the month. A schedule of deductions is available on the Human Resources website.

Q: What positions are affected?

A: There are different types of positions or job classifications that will be impacted by the change in federal regulation. The preliminary list of positions is currently being reviewed with the appropriate Management Centers and entities. After the list has been vetted, a final determination will be made for all staff members in the affected job classifications whose positions will be reclassified as non-exempt.

Q: How does the salary threshold apply for a staff member working part-time or in an exempt position who only works a 9- or 10-month schedule?

A: If the salary paid to an individual during those 9 or 10 months does not exceed the annual salary threshold, the position will become non-exempt, unless the function of the position excludes the job from meeting the salary threshold requirement.

Q: If an annual salary is $60,000, well above the salary threshold of $35,568, but the position is .5 FTE, would the position be classified as non-exempt and eligible for overtime?

A: Yes, the prorated salary would be $30,000 and below the salary threshold, so the employee in the position would be reclassified as non-exempt and eligible for overtime pay.

Q: As a non-exempt staff member, do I lose flexibility of where and when I work?

A: All work time, regardless of exempt or non-exempt classification, should be discussed and approved in advance by your manager. Staff members in non-exempt positions and departments have an obligation to ensure all time worked is tracked and reported accurately to ensure approved overtime is compensated according to FLSA guidelines.

Q: I’m currently paid a salary and my job title is manager. Am I exempt from overtime pay?

A: Job titles do not determine exempt status. The fact that a manager is paid on a salary basis does not alone provide sufficient ground to exempt that employee from the FLSA’s minimum wage and overtime requirements. For an exemption to apply, an employee’s specific job duties and salary must meet all of the applicable requirements provided in the Department of Labor’s regulations.

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