General

The Fair Labor Standards Act (FLSA) provides guidance to employers regarding the treatment of employees. The FLSA sets forth the federal minimum wage and determines which employees are eligible to receive overtime at 1.5 times their regular pay rate for all hours worked over 40 hours in a seven day workweek. At UMB, all non-exempt employees, including regular and contingent category I and II workers, are overtime eligible. Human Resources - Compensation is responsible for determining the overtime status for all University positions.

Positions that meet certain narrowly defined criteria are exempt from the FLSA's overtime requirements. This means that in order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the FLSA regulations listed below. The exemption from overtime is based on the employee qualifying for all three tests listed below.

1. Salary Basis Test – Exempt employees must be paid on an annual salary basis.
2. Minimum Salary Threshold Test – Exempt employees must be paid above a salary threshold amount. The current salary threshold is $455 per week or $23,660 annually; the new FLSA regulations will change these amounts to $913/week or $47,476/year as of Dec. 1, 2016.
3. Duties Tests - Only employees who are employed in “bona fide executive, administrative, and professional” positions who meet a “duties test” may be exempt from overtime. Duties tests require exercise of discretion and independent judgment with respect to matters of significance. Exempt employees are excluded from overtime payment. Non-exempt employees are subject to the payment of overtime.

The FLSA “salary threshold test” is changing effective Dec. 1, 2016. Effective Dec. 1, 2016, exempt employees must be paid at least $47,476 annually in order to be considered an “exempt” employee who is “exempt from overtime.” The current salary threshold is $23,660, which had not been adjusted in over 10 years. 

The Fair Labor Standards Act is a federal mandate, and UMB must comply. Failure to comply could result in significant fines and penalties imposed on the University, as well as the possible loss of federal grant funding.

Exempt employees are not required to be compensated for overtime work as part of the Fair Labor Standards Act. Non-exempt employees must be paid for hours paid beyond the standard 40-hour workweek. In short, exempt employees do not earn overtime pay; non-exempt employees do earn overtime pay.

Employee timesheets indicate whether they are an exempt staff/faculty employee or a non-exempt employee. In addition, this information is provided in the offer letter employees receive at the time of hire.

Teachers and those faculty who practice law or practice medicine qualify for an exemption as professionals. Faculty whose primary duties are teaching will remain exempt regardless of their salaries. To be exempt from FLSA overtime requirements as a teacher under 29 CFR § 541.303, the following two tests must be met:

• The employee’s primary duty must be imparting knowledge by teaching, tutoring, instructing, or lecturing
• The employee must be employed by an educational establishment

Human Resource Services - Compensation has been working with impacted UMB schools and administrative units to identify issues and finalize decisions about how to comply with the updated regulations. Decisions were made as follows:

Staff Positions

• In cases where the majority of employees in the same job title are paid less than the salary threshold, all in the job title will be reclassified to non-exempt. Eight job titles across the University will be reclassified to non-exempt. In some cases, these employees may receive a pay increase to bring them to the minimum of the non-exempt salary structure.
• If the majority of employees in a job title are above the new FLSA salary threshold, those who are below the salary threshold will be raised to $47,476.

Faculty and Postdoctoral Fellow Positions

• Faculty and postdoctoral fellows will continue to be considered exempt employees. 

Any changes to employee salary or status will take place during the pay period that begins on Nov. 27, 2016.

Human Resource Services – Compensation will work with schools and administrative units to identify employees who will be affected by the new overtime regulations; finalize decisions regarding changes no later than Sept. 1, 2016; and notify managers by Oct. 15, 2016. Managers will notify affected employees of any changes to their status prior to Nov. 1, 2016.

To comply with the new FLSA regulations, the University will be doing a combination of modifying salary levels and converting the status of certain job titles (see FAQ No. 7 above for more information). This will allow the University to preserve jobs and avoid layoffs. 

Resources are available on the U.S. Department of Labor FLSA website. In addition, a fact sheet about the updated overtime regulations is available from the White House.  If you have any questions or concerns regarding the new regulation and its impact on your school or administrative unit, please don’t hesitate to contact HRS - Compensation.

No. If you are in the ORP, you will remain in the ORP if you are reclassified to non-exempt.

As of this writing, the Board of Regents has not decided whether to allow newly reclassified employees to continue with their current leave accrual rates. UMB has been advised that such a decision may be made by the Board of Regents as late as mid-October 2016. The change to non-exempt will not impact any leave balance already accrued. 

Pay for part-time appointments will not be prorated. An employee with a .75 appointment with a full-time rate of $60,000 (above the minimum salary threshold) is paid $45,000. However, since $45,000 is below the new minimum salary threshold, the employee will need to be classified as non-exempt.

No. 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.

Non-exempt employees must account for time worked rather than accounting for duty days and leave used. All time worked must be reported.

Overtime (or compensatory time) must be paid for hours paid over 40 in a workweek. The computation of “40 hours paid” includes paid time out of the workplace (e.g., sick leave, vacation time). 

Non-exempt employees must obtain approval from their supervisor before working any additional hours, including working from home or responding to emails at home, unless previously approved by their supervisor. Non-exempt employees may make arrangements with their supervisor to telework, according to UMB Policy VII - 6.11(A) Telework Policy.

This decision is made at the discretion of the department/unit management and is based on a number of factors including budget, pay compression, and equity. While there is no additional funding for FLSA pay increases, UMB schools and administrative units have been given the option to decide to raise the pay rate of an employee in order to preserve the exempt status, where it is practical and affordable to do so.

Yes. Non-exempt employees must account for the travel time and for the hours of conference attendance, but there is no prohibition on traveling or professional development.

The term "primary duty" means the principal, main, major, or most important duty that the employee performs. Determination of an employee's primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee's job as a whole. Factors to consider when determining the primary duty of an employee include, but are not limited to:

• the relative importance of the major or most important duty as compared with other types of duties
• the amount of time spent performing the major or most important duty
• the employee's relative freedom from direct supervision
• the relationship between the employee's salary and the wages paid to other employees for performance of similar work

The amount of time spent performing the specific duty can be a useful guide in determining whether such work is the primary duty of an employee. Employees who spend more than 50 percent of their time performing a specific duty will generally satisfy the primary duty requirement. Time alone, however, is not the sole test, and nothing requires exempt employees to spend more than 50 percent of their time performing a specific duty. Employees who do not spend more than 50 percent of their time performing their major or most important duty may nonetheless meet the primary duty requirement if the other factors (listed above) support such a determination.

No. Regardless of how many jobs an employee holds, the employee’s status must be either exempt or non-exempt. For example: Employee X, whose total salary is below the minimum salary threshold, holds a part-time faculty position at Towson University as a lecturer. The employee also holds a part-time position at UMB a fitness instructor. If Employee X’s primary duty is teaching as a lecturer, then the employee’s designation is exempt because teaching is the employee’s primary duty and qualifies for the “teacher” exemption regardless of salary. But if the primary duty is determined to be work as a fitness instructor, the FLSA designation will be non-exempt because total salary is under the minimum salary threshold.