December 17, 2019
Who is exempt under the Fair Labor Standards Act (FLSA)?
What kinds of jobs are exempt and nonexempt from FLSA reporting rules?
To qualify as exempt from FLSA reporting, an employee must satisfy the following tests:
- Have a salary above the minimum threshold
- Be paid on a salary (not hourly) basis
- Perform duties that qualify for an exemption. (Exempt jobs in this test include executive, administrative, and computer professional employees.)
Teachers, lawyers and doctors as defined by the FLSA and confirmed by the UW–Madison Office of Human Resources (OHR) are also exempt from the FLSA. This includes faculty and instructional academic staff whose primary duties are teaching. (Note: Those who support teaching activities without actual teaching interaction are subject to the Fair Labor Standards Act.)
What does “primary duty” mean with regards to determining who is covered by FLSA?
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
Who makes the final determination on what is an employee’s primary duty?
The division human resources office reviews each position description and makes the determination on what is the primary duty of the position. The Office of Human Resources provides guidance on this process and reviews decisions on an as needed basis.
Changes to the Fair Labor Standards Act and who is affected
What is changing?
The Minimum Salary Threshold Test under the Fair Labor Standards Act is changing effective January 1, 2020. The U.S. Department of Labor has announced changes that will raise the minimum salary threshold to $684 a week or $35,568 per year. An employee paid above that salary can be designated as exempt from overtime requirements.
Who is affected, and how?
If an employee’s rate of pay is below the new minimum salary threshold, the employee must be designated as nonexempt unless he or she qualifies for another exemption as defined by FLSA.
If an employee changes from exempt to nonexempt:
- His/her employment category (eg Academic Staff, University Staff) will not change;
- His/her professional role in service to the University will not change;
- He/she will transition to being paid on a biweekly payroll (if not paid biweekly already);
- The employee will be paid on an hourly basis. The current annualized rate will be converted to an hourly rate;
- He/she will need to report all hours worked (and leave taken) in 15-minute increments, and will be paid for all hours worked; and
- The employee will receive overtime pay or compensatory (“comp”) time off (if eligible) at a premium rate (time and a half) for all hours worked over 40 in a work week. The employee must get pre-approval for overtime or compensatory time.
Who is excluded from these changes?
Current nonexempt employees are excluded from these changes.
Positions where the DOL does not assert an employment relationship are excluded (see U.S. DOL Fact Sheet #17S).
Teachers, doctors, and lawyers (as defined by the FLSA and the Department of Labor) already qualify for an exemption as professionals, and this is not changing. For additional information on Department of Labor (DPL) exemption definitions, please refer to U.S DOL Fact Sheet #17D.
If an employee is already nonexempt now, is he/she affected by this?
No. Current nonexempt employees are not affected by this change.
Can an employee opt out of these changes?
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.
My full time annual rate is above the new threshold but I am part time. I am being told I am being changed to nonexempt status. Why?
Whether or not you meet the salary threshold is determined by your actual earnings, not by your annualized salary. If you have a full time annual rate of $60,000 (which is above the new minimum salary threshold of $35,568 but work a 0.50 appointment, your actual earnings are $30,000 (which is below the new minimum salary threshold).
What if I change jobs? Will I still be nonexempt?
Every position is evaluated for status under the FLSA in order to see if it meets the three tests or meets a salary threshold exemption. If you change positions, your FLSA status will change to the status associated with the new position.
Reporting Hours Worked, Overtime and Compensatory Time
Does becoming nonexempt mean I will change employment classes?
No, there will be no change in employment class as a result of the change to nonexempt.
Does becoming a nonexempt employee affect my pay frequency or leave time accrual?
Nonexempt staff will change from receiving their paychecks monthly to receiving them biweekly. Check with your payroll and benefits staff and human resources staff for more guidance on specific payroll procedures and practices.
Staff that are eligible for leave will continue to accrue leave time at the same level. Additionally, this will have no effect on Family Medical Leave (FMLA).
Does becoming nonexempt and recording hours worked mean my regular weekly schedule or hours of work has to change? What if I am late or absent?
The employee’s schedule or call-in procedures do not necessarily have to change as a result of becoming nonexempt, but it might. The employee should confirm with his/her supervisor how this may affect work hours, schedules, and call-in procedures. Some nonexempt employees have regular set schedules, and some have more flexible or varied schedules.
Don’t all employees, salaried and hourly, report time? How is tracking hours worked different, for a nonexempt employee?
Yes, all employees report time. However, nonexempt employees must report “hours worked.” All time worked must be reported. Leave is reported and accounted for in 15 minute increments. Salaried employees (exempt) must report leave taken.
If a nonexempt employee is 100% full-time, but she works only 35 hours in a work week, would she have to use 5 hours of paid leave time to make up the difference, if she wants to be paid for 40 hours for that week?
Yes. A nonexempt employee is paid for the actual hours worked, and if that does not equal the scheduled hours worked for that week, the employee would need to use available paid leave time including comp time, vacation, sick, etc. to make up the difference.
When is an employee entitled to overtime or compensatory time?
Nonexempt employees are entitled to compensation for all hours worked. Overtime or compensatory time (at premium time; or time and a half) is earned for all hours worked over 40 in a work week. The work week is Sunday through Saturday. “Hours worked” does not include paid time out of the workplace (e.g., sick leave, vacation time, etc.).
- Compensation for hours worked up to 40 in a work week is at “straight time” (the regular hourly rate). This is awarded as cash payment.
Compensation for hours worked over 40 in a work week is at “premium time” (one and a half times the regular hourly rate). This can either be paid as overtime pay or accrued as compensatory (“comp”) time. See HR Policy 11.01: Overtime (Appendix 1) for more details.
Who decides if an employee can work overtime?
Overtime must be preapproved and is at the discretion of the school/division/college – and supervisor. An employee must get approval to work overtime, according to procedures/policies set by the school/division/college and/or supervisor.
What if a supervisor does not approve (or refuses to approve) a nonexempt employee’s time? Will that nonexempt employee get paid for the time?
Nonexempt employees must be paid for all hours worked. If a nonexempt employee works, he/she must be paid for those hours, even if they are unauthorized or not preapproved. While there may be disciplinary consequences to the employee for working unauthorized or unapproved hours, the supervisor cannot refuse to approve the hours worked just because the time was not preauthorized. If on the other hand the supervisor fails to approve the time in a timely fashion, or runs into errors while submitting, it is the responsibility of the department/division payroll and benefits staff to take action to ensure payment to the employee.
Where do I get additional information on how to record time?
Information on time reporting, accessing your timesheet as well as many other questions can be addressed by your local HR contact. For a list of those contacts, please go to Contact HR.
What if a Principal Investigator (PI) tells a staff member (ex. graduate assistant, academic staff or university staff) to not record all of his/her hours worked, or to lie about his/her hours worked?
It is not up to any non-exempt employee or a PI to make a decision or evaluation about whether to comply with federal law. Even if an employee is willing to “volunteer” to work extra hours or for less than the minimum salary, UW–Madison and the PI are legally required to pay him/her the minimum salary or pay him/her for all the hours worked. If any employee is asked to lie about his/her hours or sees any others employees being asked to work undocumented overtime, he/she should report the violation to the Divisional Human Resources Office or the Office of Human Resources/Workforce Relations. Itis illegal for employers to fire, retaliate, or discriminate against an employee for filing a complaint.
For nonexempt employees, are there any requirements for breaks/lunches?
UW–Madison policy requires that nonexempt University Staff have a required break of 30 minutes when working 6 or more hours in a day. Additionally, nonexempt University Staff are entitled to two, 15-minute paid breaks in a work day. Although nonexempt Academic staff do not have these same requirements, supervisors are encouraged to provide similar breaks. Nonexempt academic staff should check with their supervisor regarding expectations for work schedules, breaks and lunches.
As an exempt academic staff I am able to attend medical appointments that take less than 2 hours, without reporting leave. Can I still do this if I change to nonexempt?
A nonexempt employee will need to record leave in 15-minute increments for this absence, unless the supervisor has preapproved otherwise. The employee should confirm with his/her supervisor how this may affect work hours and schedules. Some nonexempt employees have regular set schedules, and some have more flexible or varied schedules.
What is counted as hours worked for a nonexempt employee, and who decides? Can a nonexempt employee come in to work early and stay late? Check messages from home after work hours? Go to conferences or travel?
Information on what is considered compensable hours can be found in HR Policy 11.01: Overtime – Appendix 1. Information specific to your work situation should be discussed with your supervisor in order to determine your work schedule.
Can a nonexempt employee work more than his/her scheduled hours? For example, if the employee is part-time and has a 50% FTE (or 20 hours per week), can they work 25 hours? If they do, what do they earn for those extra hours? When do they start earning overtime?
A part-time nonexempt employee can work more than his/her scheduled hours, with supervisor approval, unless they are an International Student. When this occurs, the employee receives their regular hourly rate for all hours worked until they reach 40 hours worked in the workweek. Any hours worked over 40 hours are considered overtime and earn payment at the premium rate.
International Students are limited to 20 hours per week by their Visa requirements.
How does a nonexempt employee report his/her hours if they fluctuate from week to week? Can an employee just record the same hours every week and not record the variations, as long as it evens out in the long run?
Nonexempt employees must report all actual hours worked each week and are expected to work the number of hours each week associated with their FTE (ex. a 50% FTE works 20 hours/week). A nonexempt employee cannot choose to record only some selected hours worked – he/she must report all hours worked, regardless of the effect on overtime.
A nonexempt employee is expected to supplement leave time when they do not work the hours associated with their FTE. With supervisory approval, employees can fluctuate the days of work or times of work within the same workweek in order to accommodate time off.
Who decides if compensatory (“comp”) time is allowed at a school/college/division for eligible employees? If allowed, how much can be accumulated?
Comp time accrual and usage is at the discretion of the school/college/division. Not more than 80 hours of comp time can be accumulated by eligible employees. When an employee has 80 hours of comp time earned, no additional comp time can be earned, and any overtime earned would need to be paid out as overtime pay.
Can a part time employee earn compensatory time if they work more hours than their normal schedule?
Comp time can only be accrued only when a comp time eligible nonexempt employee works more than 40 hours in a work week. Hours worked under 40 in a work week are paid, but at the regular hourly rate (straight time).
Are non-exempt academic staff or graduate assistants eligible for night differential pay, or weekend differential pay?
No, non-exempt academic staff and graduate assistants are not be eligible for night differential pay, or weekend differential pay.
How do I record travel and conference time as time worked?
Travel time is recorded the same way as other hours worked, with no special time codes. Whether employees are paid for travel time largely depends on the kind of travel involved. Employees should work closely with their supervisor, and/or HR Rep, to determine whether the travel time is compensable. Employee attendance at conferences is generally compensable time provided that the conference is job related, employee attendance is directed by the employer and the conference is not outside normal work hours.
Program Assistants and Project Assistants
How will tuition remission be affected by this change? As a PA, I have to meet a certain level of earnings over the course of the semester in order to get tuition remission.
Per the Regent Policy and Wis. Stat. 36.27(3), there is strong language that states in order to remain eligible for tuition remission, all that is required is that the employee have at least a 33% appointment. We find nothing in the statute or the Regent Policy that addresses actual earnings. As such, the move to hourly will not endanger tuition remission as long as the PA has a 33% appointment.
Why aren’t all Graduate Assistant positions affected by this change?
The Department of Labor typically views graduate and undergraduate students who are engaged in research under a faculty member’s supervision in the course of obtaining a degree as being in an educational relationship with the university. According to DOL, it would not assert an employment relationship exists with the university in these cases. This is true even if the student is receiving a stipend for performing the research. By this definition, the following titles are “non-employees:”
Research Assistant, Fellow, Advanced Opportunity Fellow, Scholar, Trainee
Program Assistant, Project Assistant, Teaching Assistant and Lecturer (SA) are considered employees by the DOL. Teaching Assistant and Lecturer (SA) are not subject to the minimum salary threshold because they meet the Teacher exemption (primary duty is instruction).
I hold a 50% PA appointment that accrues leave time. Can I fluctuate my hours so I work 40 hours over two weeks (ex. 25 hours Week 1 and 15 hours Week 2)?
It is an expectation that Program Assistants/Project Assistants work the number of hours associated with their FTE on a weekly basis. In instances where the employee goes below the required hours, those hours should be supplemented with leave time.
My PA appointment is a 9-month appointment (C-Basis) and does not accrue leave. What do I do if I work less than the hours associated with my FTE?
C-Basis PAs only earn sick leave hours. If the student is unable to work due to illness, sick leave can be used for the absence. If the absence is not due to illness, the only other alternative for the student to make up the time on another day during that week.
Does this mean I can get paid at an overtime rate if I work more than 40 hours per week?
As a domestic PA, you are limited to a maximum appointment percentage of 75% or 30 hours per week during the academic year. International PAs are limited to 20 hours per week by their Visa requirements. However, domestic and international PAs can work full-time or 40 hours per week during semester and spring breaks and any hours after 40 will be compensated at the premium rate.
Not getting half of my January paycheck until mid-February is an enormous hardship. What university resources are available to help me make it through the transition?
Employees who are transitioning from a monthly to a bi-weekly payroll as a result of this change may experience cash flow challenges in early February, as the biweekly paycheck results in a smaller amount compared to the former monthly paycheck. To assist with this transition, UW–Madison is offering financial assistance to affected employees in the form of short-term, interest-free loans.
My work is weather dependent and there are times I must fluctuate my hours due to weather. How do I account for this on my timesheet?
Non-exempt employees must be paid for all hours worked so the hours worked must be recorded on the timesheet. You should work with your supervisor to ensure expectations are clear.
Project Assistant are eligible for legal holiday. How do I note legal holiday hours on my timesheet?
Legal holidays have to be entered in the timesheet by the Payroll Coordinator for Project assistants.
How much leave time do Project Assistants earn?
The leave time available to Graduate Assistant appointments can be found in the Graduate Assistantship Policies and Procedures.
I have two positions, one is exempt and the other is non-exempt? What is my FLSA status?
The FLSA status of the employee is based on the employee’s primary duty for the University across both positions. Contact your Divisional Human Resources Office for questions.
Can a project assistant appointment be considered FLSA exempt? If yes, in what circumstances?
Yes. To qualify as exempt from FLSA reporting, an employee must satisfy the following tests:
- Have a salary above the minimum threshold
- Be paid on a salary (not hourly) basis
- Perform duties that qualify for an exemption. (Exempt jobs in this test include executive, administrative, and computer professional employees.
Teachers, lawyers and doctors as defined by the FLSA are also exempt from the FLSA.
If an employee has a two positions and one is non-exempt and the other is a “non-employee” (ex. Research Assistant), will the employee receive two paychecks?
Yes, the employee will receive a bi-weekly paycheck for the non-exempt position and a monthly paycheck for the Research Assistant.
If an employee is asked to attend a conference for work purposes, but travel time and conference attendance may result in more hours in a workweek than their appointment percentage allows, how will this be addressed?
FLSA and Employment Category
Does a change from exempt to nonexempt change an employee’s designation as academic or university staff?
No. The change from exempt to nonexempt does not change an employee’s designation as academic or university staff, only whether the employee is exempt or nonexempt from FLSA requirements. Assuming an academic staff employee’s duties remain exempt, but that employee’s pay falls below the new salary threshold, then the employee will remain academic staff – but become academic staff nonexempt (and paid hourly).
Can an exempt University Staff employee still convert to academic staff under the Employee Choice Program?
Yes, exempt University Staff employees will still have the option to voluntarily reassign to academic staff, under the Employee Choice Program. If an exempt University staff employee voluntarily reassigns to academic staff under the Employee Choice Program and is below the salary threshold, the employee will become nonexempt academic staff (paid hourly). For more information, please contact your Divisional Human Resources Office.
Does the change from exempt to nonexempt affect an employee’s leave accrual?
No, this does not change the leave accrual processes.