FLSA (Fair Labor Standards Act) Frequently Asked Questions

What is the FLSA?

The Fair Labor Standards Act of 1938 is a federal law that regulates various aspects of employment law such as minimum wages, child labor standards and overtime pay provisions. The overtime pay provisions of the law establish standard criteria (tests) that employers must use to determine which jobs in their organization are covered (exempt) from overtime pay provisions. These tests concentrate on the responsibilities and duties assigned by the employer to the job. Personal qualifications, job titles and hours worked have no bearing on whether the job can meet the test and be considered ineligible for overtime.

The United States Department of Labor (DOL) assumes that all jobs in an organization are eligible for overtime unless proven by the employer (by use of tests) to be exempt. Failure to comply with the FLSA is punishable by substantial fines and ongoing audits by the DOL.

At the University of St. Thomas, those jobs that can pass an exemption test are classified as salaried. Those that cannot and are eligible for overtime pay are classified as hourly.

Why are these changes happening now?

In April of 2004, the DOL published changes to the regulations that affect the exemption testing of jobs. These changes were initiated due to decades of complaints against employers who were denying their employees their overtime rights under the law. As a result, the DOL conducted an effort at soliciting input from citizens as well as incorporating forty years of case law into the regulatory changes. All employers are legally required to re-check and document all jobs to establish whether the FLSA overtime provisions apply to them or not. UST is confident that our audit puts us in compliance with the new regulations.

How was this audit conducted?

The Human Resources Department conducted a comprehensive audit of all jobs using updated job profiles generated by supervisors and managers. We also worked with the University's legal counsel to apply FLSA criteria to jobs where there were questions about proper application of the new FLSA regulations.

What are the FLSA exemption tests and how do they work?

To qualify for exemption from the FLSA, jobs must convincingly and clearly meet one of the five (5) exemption tests listed by the DOL. A job's specific duties and responsibilities must meet the requirements of the DOL's regulations and interpretations. Jobs must also be paid on a salary basis at no less than $455 per week. Job titles in no way determine exemptions status. Furthermore, interpretations are subject to case law and DOL opinion letters.

The five tests are:

Executive Exemption
To qualify for exemption, all of the following must be met and documented:

• Employee's primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
• Employee must customarily and regularly direct the work of at least two or more full-time employees or their equivalent;
• Employee must have the authority to hire or fire employees, or the employee's suggestions and recommendations to the hiring, firing, advancement, promotion, or any other change of status to other employees must be given particular weight.

Administrative Exemption
To qualify for exemption, all of the following must be met and documented:

• Employee's primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers;
• Employee's primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Professional Exemption
To qualify for exemption, all of the following must be met and documented:

• Employee's primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment;
• The advanced knowledge must be in a field of science and learning;
• The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

Computer Employee Exemption
To qualify for exemption, the following tests must be met and documented:

• Employee must be employed as a systems analyst, programmer, software engineer, or other similarly skilled worker in the computer field performing the primary duties listed in the regulations.

Outside Sales Exemption
To qualify for exemption, all of the following must be met and documented:

• Employee's primary duty must be making sales (as defined in the regulations), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client;
• Employee must be met customarily and regularly engaged away from the employer's place or places of business.

Where can I find more information on the FLSA?

The FLSA reference site at the Department of Labor is: http://www.dol.gov/esa/whd/flsa

How many jobs are being affected across the University?

Approximately 30 jobs are being moved from salaried to hourly status.

How will I know if my status has changed?

Affected employees will receive written notification from Human Resources informing them of the change.

Will the change affect my pay grade or pay rate?

No. Total annual salary and job grade will remain the same for all positions affected by this change.

How does this affect my benefits and vacation leave balance?

All earned but unused vacation leave days will be converted to Personal Leave Time (PLT) on an hour-to-hour basis. Hourly employees accrue paid leave time (sick leave, vacation and floating holiday) as follows:

Length of Service	Accrual (Per hour worked)	Weeks Per Year	Hours Per Year
3 months - 4 years	.068	3.5 weeks	141.44
4 - 12 years	.090	4.7 weeks	187.20
12 years and over	.109	5.7 weeks	226.72

Employees who have 4 or more years of service will have an additional 27.20 hours added to their PLT leave balance and employees who have 12 years or more of service will have an additional 26.72 hours added to their PLT leave balance. Managers will certify to Human Resources in writing as to the current leave balance carried by affected employees.

Does this change to hourly mean that I am being demoted?

No, not at all. This action ensures that UST is in compliance with the law and that you are receiving those overtime pay rights that you are entitled to. Changing status from salaried to hourly does not diminish or change the value that is attached to the job by UST.

Will I have to check with my supervisor every time I work overtime?

Yes. All overtime must be pre-authorized by your supervisor. Failure to do this will subject you to discipline. Your supervisor is also responsible for ensuring that all overtime eligible hours are posted on your timesheet and paid to you in the corresponding paycheck.

How will I receive guidance on recording my time and completing my timesheet?

Your supervisor will show you how to complete your timesheet and the deadline for submitting it to her/him. You may also contact the Payroll Department for assistance.