Proposed Fair Labor Standards Act (FLSA) Changes

The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting all United States employees in the private sector and in Federal, State, and local governments, including Higher Education.  Employees are either “exempt from overtime” or “non-exempt from overtime” pay based on FLSA regulations.  The U.S. Department of Labor (DOL) administers the FLSA regulations.

Under the current regulations, a position must satisfy three criteria to qualify as exempt from overtime:

1.  The incumbent in the position must be paid on a salaried basis (the salary basis test);
2. The salary must be at least $684 per week or $35,568 annually (the minimum salary requirement or salary threshold); and
3. The position’s “primary duties” must be consistent with executive, professional, administrative, and computer related positions as defined by DOL (the primary duties test).

Teaching faculty will not be impacted. Teaching faculty are FLSA exempt, regardless of their annual/weekly salary, if their "primary duty is teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge." Typically coaches also qualify as FLSA exempt under this "teaching exemption" and will not be affected by the changes.

On November 15, a federal judge in the Eastern District Court of Texas ruled to invalidate the Biden administration’s Fair Labor Standards Act (FLSA) overtime final rule. We are closely watching for any future updates.

Exempt (salaried) employees are excluded from receiving overtime pay. Non-exempt (hourly) employees are required to be paid overtime (at a rate of one and one-half times their regular rate of pay) for any hours worked in excess of forty hours in a seven-day workweek as defined by their employer.

At OHIO, the majority of Administrative and Professional, Executive, and Faculty positions fall under the FLSA exempt category.

At Ohio University, exempt employees are paid semi-monthly and do not report time worked in Workforce, our time keeping system. Non-exempt employees are paid on a biweekly basis and enter hours worked into the Workforce timekeeping system.

If you are currently classified as "salaried" and your earnings fall below the new threshold amount, you may be affected by the proposed changes. The University is working to apply a consistent approach to these changes to ensure fairness within pay ranges. Therefore, even if you currently earn above the new threshold, you might still be impacted to maintain consistency within your pay range. This would be to ensure current, and potentially future employees, in the same position would have a consistent determination. University Human Resources will notify affected employees after the University has assessed the implications and communicated with University departments.

Impacted employees will switch from a semi-monthly to a bi-weekly pay schedule.

Biweekly pay means employees are paid every two weeks, typically resulting in 26 pay periods per year. Semi-monthly pay means employees are paid twice a month, usually on specific dates such as the 15th and the last day of each month, resulting in 24 pay periods per year.

Paying in arrears means you pay an employee for work they completed in the previous pay period. This is in contrast to “current pay,” which is when an employer pays an employee the last day of the workweek. Arrears payments are utilized for hourly employees to ensure all the hours worked are accurately captured and recorded.

Employees whose positions are reclassified to non-exempt will change to the appropriate leave accrual schedule. However, the annual accrual rates will not change.

• Time Reporting: Non-exempt employees record all hours worked in WorkForce on a biweekly schedule. Applicable compensatory or overtime hours are recorded and paid accordingly.
• Overtime for Non-exempt employees: Non-exempt employees must record all hours worked, including overtime hours, and will receive additional pay for overtime. All overtime must be pre-approved by your supervisor.

The hours an employee works over 40 hours in a workweek is called overtime. It is paid at a standard rate of time and a half or 1.5 times the standard hourly rate. 

The change of moving from salaried (exempt) to hourly (non-exempt) is focused on ensuring work hours are reported and paid, not when they are worked. Hourly employees (non-exempt) can still request alternative scheduling arrangements with their managers; however, all time worked must be recorded within the timesheet. All current and future alternative scheduling arrangements will have to be revisited with your management, with an understanding as to when overtime is permissible. 

On November 15, a federal judge in the Eastern District Court of Texas ruled to invalidate the Biden administration’s Fair Labor Standards Act (FLSA) overtime final rule. We are closely watching for any future updates.

While your salary exceeding the new threshold may indicate that you will remain an exempt employee, it's important to note that additional factors may influence your classification. The University is ensuring consistent application of these changes across pay ranges, which may impact your classification despite your salary level. 

No. The FLSA is a federal law. The determination of an employee’s FLSA status is governed by the requirements of the federal law – it is not an employee choice. It is at the discretion of the organization with regard to each individual’s compensation, position responsibilities, position exemption status for positions with same or similar titles, and the new regulation. In order to be exempt from FLSA provisions (not eligible for overtime), employees must pass both the duties test and salary tests. If you do not pass these tests, you must be paid for overtime hours worked under the law. Exempt employees must also be paid on a salary, not hourly, basis. 

Complete information on the new rule is available from the Department of Labor’s Wage and Hour Division(opens in a new window). Please contact Human Resources at 740-593-1636 or by email at UHR@ohio.edu. FAQs will continue to be updated as we learn more. 

Part-time workers are required to meet all three tests (the duties test, salary basis test and salary level test) to be exempt from overtime pay requirements. Regardless of full- or part-time status, employees must be paid at least the minimum salary threshold on a weekly basis in order to be exempt from overtime pay requirements. It is important to note that the minimum salary threshold cannot be prorated for part-time employees.

According to the Wage and Hour Division (WHD) Field Operations Handbook, institutions “may prorate the salary of an otherwise-exempt employee who has a duty period of less than a full year.” For example, an employee who works a nine-month schedule but receives paychecks over a 12-month period may have their checks prorated over the actual period of work (nine months) to determine whether the employee is paid at least the salary threshold. It is important to note, however, that the nine-month employee cannot perform any work outside of the nine-month period if employers choose to prorate their salary to meet the minimum salary threshold.
 

Yes. Temporary hourly, non-exempt employees are not eligible to receive compensatory time off in lieu of overtime pay. Other hourly, non-exempt employees may elect to receive compensatory time off in lieu of overtime pay. Such compensatory time is also awarded at the premium rate of one and one-half hours of time off for each hour of overtime. A maximum accrual of four hundred eighty hours is permitted for intermittent employees; a maximum accrual of two hundred forty hours of compensatory time is permitted for other employees. When the maximum hours of compensatory time accrual is reached, compensation for overtime shall be made in cash.

For more information regarding compensatory time please visit 40.049: Overtime for Non-Exempt Employees.

You will code the time in WorkForce as hours worked and you will take a day off in the future. This day should be taken as soon as possible, but no later than June 30. When you do take the day off, you will use the pay code of “Other” in WorkForce to record your time and indicate "WBC" in the comments.

Overtime is considered any time worked over 40 hours per work week, not the two-week (80 hour) pay period. A work week is considered Sunday through Saturday. EX: If you work 44 hours in week one of a pay period, you will be paid 4 hours of overtime, even if you only have 36 hours worked in week two.

No, because overtime is calculated based on the 40-hour work week. You cannot flex your time from week to week, it can only be flexed in one work week. EX:  If an employee works 44 hours in week one of the pay period they cannot flex the following week by working 36 hours.

1.    Why is there an hourly rate on my paystub?
Even for salaried employees, our payroll system calculates and displays an hourly rate based on the number of days in the pay period. This rate may fluctuate slightly between pay periods depending on the length of the pay period (e.g., if one pay period is longer or shorter than another). Please note that this variation does not reflect any actual change in your salary. The total amount you are paid for the pay period is accurate, but the hourly rate displayed is for informational purposes and can shift due to payroll system settings.

2.    If I’m transitioning to hourly, how can I check my correct hourly wage?
If you are a full-time (1.0 FTE), 12-month employee, you can generally estimate your hourly rate by dividing your annual salary by 2,080 hours (the number of working hours in a year for a full-time employee). However, please note this calculation applies to full-time, 12-month employees. Part-time employees or those with different contract lengths or schedules may have different calculations. For your official hourly rate, please refer to your job offer letter, or contact your HR liaison if you have questions about your rate.

Supervisors will provide guidance to employees who are non-exempt (hourly) before they travel. A travel
guide is linked below for your reference. If there are questions or specific circumstances which need
further clarification, please contact your respective HR Liaison or the compensation team at compensation@ohio.edu.

Fact Sheet #22: Hours Worked Under the Fair Labor Standards Act (FLSA) | U.S. Department of Labor