Fair Labor Standards Act (FLSA)
Recently announced changes to FLSA, or the Fair Labor Standards Act, are slated to take effect on January 1, 2020. This new rule will require employers to pay overtime to unclassified employees making less than $684 per week or $35,568 annually. Certain employee groups are exempt from the Department of Labor salary test and are not required to meet the new salary threshold; this includes teachers, coaches whose main responsibility is not recruitment, medical/veterinary interns and residents. These are the only classifications exempt from this new overtime rule. Note, there is no proration for part time workers. Human Resource Management (HRM) has identified all job profiles and workers who are currently below the new salary threshold and will review job function and salary against Department of Labor guidelines to determine appropriate classification. Based on the new federal FLSA regulations, LSU is required to reclassify employees making less than or $684 per week or $35,568 annually from exempt to nonexempt status which affects your department in the following ways:
- Affected employees will go to a biweekly pay cycle effective 12/21/2019 and will have their base salary converted to an hourly rate. Affected employees will be required to enter their time in Workday to get paid. Timely manager approval in Workday is required in order for the employee to get paid.
- Affected employees will be paid 1.5 times their regular hourly rate for time worked in excess of 40 hours in an assigned and contiguous workweek.
- Each department is responsible for the financing of their overtime or compensatory time from their regular budget. Departments should account for their annual overtime needs within the annual budget construction process.
- Departments must establish and inform each employee in writing who is being paid an annual base salary under $35,568 of their regular work hours, work schedule, and hourly rate by December 1, 2019.
Managing Overtime: Departmental Choices
- Departments may choose to increase salaries for positions currently below the threshold; however, those positions that pay more than $35,568 annually will still need to pass the Department of Labor Tests for consideration as exempt from overtime.
- Departments can also manage overtime costs by offering compensatory time provided that certain criteria are met. Offering compensatory time in lieu of overtime pay must be agreed upon in writing prior to the work being performed.
- Departments can manage overtime costs by modifying workloads and adjusting schedules or hours.
Resources Provided
- HRM will set up meetings with those units with affected employees and provide a list of affected employees in order to assist you in developing a strategy to comply with the regulations that aligns with departmental needs.
- A Supervisor Toolkit will be available November 6, 2019 providing the following information:
- A Brief Overview of Fair Labor Standard Act (FLSA) 2019 Change
- Key Points for Departments
- Tips for Managing Overtime and Use of Compensatory Time
- Understanding New Overtime Eligibility Rules
- Supervisor Talking Points
- Written Notice for Employees Affected & Employee Toolkit
- Frequently Asked Questions
- University Communication and Training Resources
- An Employee Toolkit will be available November 6, 2019 providing the following information:
- A Brief Overview of Fair Labor Standard Act (FLSA) 2019 Change
- Key Points for Employees
- Change in Pay Cycle
- Understanding New Overtime Eligibility Rules
- Benefit Impacts
- Written Notice for Employees Affected (to be provided to Employees affected in addition to Toolkit)
- Frequently Asked Questions
- University Communication and Training Resources