Fair Labor Standards Act (FLSA)
Fair Labor Standards Act (FLSA)
Background
The Fair Labor Standards Act (FLSA) is Federal law, dating back over half a century, that establishes certain minimum standards for wages, premium overtime, and other employment conditions. The FLSA did not apply to the University (i.e., we were not a "covered employer") until 1967 when amendments extended coverage to various government-related agencies. That coverage lasted only a few years before the Supreme Court decision voided the amendments. The coverage was finally re-established in 1985 through another Supreme Court decision and further Congressional action.
The Fair Labor Standards Act covers:
Minimum wage
Equal pay
Child labor
Overtime pay
Record-keeping
Types of Employees
The FLSA identifies two types of employees: "non-exempt" employees and "exempt"employees. One of the requirements of the FLSA is for an employer to determine the exemption status of each employee.
Non-exempt Employees
Non-exempt employees are covered by the minimum wage and overtime provisions of the FLSA. As such, they are required to account for time worked as well as use of sick, vacation, and other leave time to the nearest one-quarter hour. The FLSA requires that these employees be compensated for qualified overtime hours at the premium (time-and-one-half) rate.
Compensation Provisions for Non-exempt Employees
For all hours worked over 40 in a workweek, premium overtime is paid at the time-and-one-half rate. Employees may be compensated by time off at the time-and-one-half rate by agreement with the employee
Vacation and sick leave and compensatory time is recorded to the nearest one-quarter hour
When an employee has exhausted all available accrued vacation and sick leave and
compensatory time off, salary is reduced ("docked") in proportion to any absences from scheduled work time.
In cases of corrective action, suspension without pay for periods of less than one week will be permitted.
Compensatory Time Off for Employees Not Represented by an Exclusive Bargaining Agent
The University compensates for overtime worked either in the form of compensatory time off or with pay, at management discretion, as a condition of employment.
Under provisions of the FLSA, agreement to accept compensatory time off in lieu of overtime pay is entirely voluntary. Notice Regarding Overtime Compensation at the University is provided to all new non-exempt hires, and to current employees whose status changes to non-exempt as a result of transfer, reclassification or promotion.
Overtime Provisions for Represented Employees
Refer to the bargaining union contract for any covered employee. The contract may provide specific rules for compensating overtime.
Exempt Employees
Exempt employees are not covered by (or are “exempt” from) the FLSA’s regulations pertaining to overtime. Four major exemption categories have been established and defined by the Act. They are "executive," "administrative," "professional" and “outside sales.” To be determined exempt under one of these categories, the employee’s position must meet certain criteria relating to their job responsibilities.
Exempt employees are:
Paid an established monthly (or annual) salary
Paid for carrying out the duties of their position – regardless of how many hours worked
exempt employees may work more or less than 40 hours per week and their pay does not change
They do not receive overtime nor compensatory time off
Due to the “salary” nature of the position, consult your HR expert before you consider reducing the pay of an exempt employee.
Vacation and sick time must be charged in full-day increments (not hours or portions of a day).
When a full-time employee has exhausted all available accrued vacation and sick leave and previously accrued compensatory time off, salary will not be reduced ("docked") for absences of less than a full day. Salary may not be reduced for absences of less than a full day.
In cases of corrective action, suspensions without pay will not be permitted for less than one full workweek, except in the case of suspension for infractions of safety rules of major significance.
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