2020 Changes to the Fair Labor Standards Act
The Fair Labor Standards Act (FLSA) is the United States' federal wage and hour law, administered by the U.S. Department of Labor (DOL). Among other things, it establishes the federal minimum wage and sets overtime pay requirements for employees in the private and government sectors.
Under the FLSA, some employees are exempt from the wage and overtime provisions of the law and some are nonexempt. The FLSA requires that all nonexempt workers be paid overtime (usually one-and-one-half times their regular rate of pay) for all hours worked over 40 in a workweek.
Exempt employees are considered "salaried" and do not earn any overtime compensation for working over 40 hours in a workweek. They must also perform certain types of job duties to qualify as exempt. At FSU, most Administrative and Professional (A&P), Executive Service (AEX), and Faculty positions are FLSA exempt.
Nonexempt employees are considered "wage earning" and must be paid overtime for all hours worked in excess of 40 in a workweek (Friday - Thursday). At FSU, most University Support Personnel System (USPS) and Other Personal Staff (OPS) positions are FLSA nonexempt.
On September 24, 2019, the Department of Labor (DOL) released changes to the FLSA that increased the minimum salary required for an employee to be exempt from overtime pay under the "White Collar Exemptions" for executive, administrative, and professional employees, from $455 per week to $684 per week.
Effective January 1, 2020, an employee must meet the following criteria to be classified as FLSA exempt under the "white collar exemption" with the DOL:
- Perform primarily executive, administrative, or professional duties as defined under DOL regulations; AND
- Earn at least $684 per week ($35,705 annually based on FSU’s 26.1 pay periods).*
*A few types of employees may be classified as exempt without meeting the salary minimum, for example teachers, lawyers, and doctors.
With the release of the final regulations and in collaboration with University administration, the Office of Human Resources evaluated the impact on University positions and developed a plan to refine our approach to FLSA exemption. Changes to positions have been determined centrally and will be communicated directly to impacted departments and employees over the next few weeks.
The University minimum annual salary threshold for FLSA Exempt appointments will become $35,705.
Florida State University’s action plan will be implemented on April 3, 2020.
- Current nonexempt A&P employees will be impacted. Employee status will change from nonexempt to exempt. Employees in such positions will become ineligible to earn overtime wages or compensatory leave if they work over 40 hours in a work week. Those employees changing status from nonexempt to exempt will be subject to the new minimum salary threshold, which has increased with this legislation; positions making less than the new threshold will receive a salary increase to meet the minimum for exemption ($684 per week/$35,705 annually based on FSU’s 26.1 pay periods). The employee’s benefits, retirement options, sick and annual leave accrual rates, and pay plan will not change. Reclassified employees already meeting the minimum salary threshold will not be impacted.
- Part-time staff employees of all types may be reclassified to nonexempt if their weekly pay while part-time is under the new FLSA salary minimum for exempt employees. While these employees are nonexempt, they will be required to track their hours, but pay rates, benefits, and any leave accrual rates will not be impacted.
Positions currently classified as exempt will not be impacted. Annual salaries for exempt employees already meet the minimum salary threshold for exemption. These positions will remain ineligible for overtime or compensatory leave if working more than 40 hours in a work week.
- Nonexempt A&P employees will be impacted. Employee status will change from nonexempt to exempt. Employees in such positions will become ineligible to earn overtime wages or compensatory leave if they work over 40 hours in a work week. Those employees changing status from nonexempt to exempt will be subject to the new minimum salary threshold, which has increased with this legislation; positions making less than the new threshold will receive a salary increase to meet the minimum for exemption ($684 per week/$35,705 annually based on FSU’s 26.1 pay periods). The employee’s benefits, retirement options, sick and annual leave accrual rates, and pay plan will not change. Reclassified employees already meeting the minimum salary threshold will not be impacted.
- Exempt A&P employees will not be impacted. Annual salaries for exempt employees already meet the minimum salary threshold for exemption. These positions will remain ineligible for overtime or compensatory leave if working more than 40 hours in a work week.
USPS employees (both nonexempt and exempt) will not be impacted by the changes, including those making more than $35,705.
- OPS exempt employees (overtime ineligible) will not be impacted. Exempt employees already meet the new minimum salary threshold of $35,705.
- OPS nonexempt employees (overtime eligible) will not be impacted, including those making more than $35,705.
Graduate Assistants will not be impacted.
- Teaching faculty will not be impacted. Teachers are FLSA exempt, regardless of their annual/weekly salary, if their "primary duty is teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge." Most faculty positions, including all tenure stream positions and all FSUS teachers, qualify as FLSA exempt under this "teaching exemption" and will not be affected by the changes.
- Specialized/Non-teaching faculty, such as curators, university librarians, and research faculty will not be impacted by these changes. Salary thresholds for new hires will move to $35,705.
- Full-time Postdoctoral Scholars will not be impacted by these changes. These employees already meet the new minimum salary threshold and will remain FLSA exempt (overtime ineligible).
- Part-time Postdoctoral Scholars making less than $684 per week/$35,705 annually due to part-time employment will become FLSA nonexempt (overtime eligible) and be entitled to overtime compensation if they work over 40 hours in a single workweek. Postdocs should be appointed at a Full Time Equivalent (FTE) that accurately reflects their workload.
No – These changes are driven by changes to federal law that will apply to employees across the United States, not by FSU's policymakers or individual departments. The University has and will continue to consult with departments across campus on factors impacting FSU's response to these regulatory changes. However, guidelines have been established centrally to ensure the University's response is consistent, non-discriminatory, sustainable, and legally compliant.
Will all currently exempt employees under the new salary threshold receive a pay increase to remain exempt?
The University’s exempt employee salaries are already in compliance with the changes, with these positions already making above the new salary threshold.
Employees reclassified to exempt will become ineligible to earn overtime wages or compensatory leave if working over 40 hours during a given week, but their job duties will not be impacted as a result of the FLSA changes.
Reclassified employees will stay in their current university pay plan (A&P, USPS, OPS, Faculty), retaining all the attributes of the pay plan (leave accrual rates, retirement, health insurance, employment contracts, etc.). Any union membership eligibility will not change. Pay rates will only change if currently below the new salary threshold, in which case employees will receive a salary increase to meet the minimum salary threshold for exemption ($35,705 annually).
- For example, an A&P employee who is currently nonexempt (overtime eligible) whose job code is moved to exempt (overtime ineligible) due to the FLSA changes would become "A&P exempt."
Why does FSU say the minimum annual salary for exempt employees under the FLSA is $35,705 when the Department of Labor says $35,568?
The annual salary figure for FSU differs slightly from the annual salary published by the Department of Labor because FSU has 26.1 pay periods in a year. The Department of Labor's $35,568 annual salary estimate is based on $684 per week with an assumption that an employer is calculating the annual salary figure based on 26 pay periods in a year. However, at FSU the annualized rate is slightly higher because we have an extra 0.1 pay periods:
- $684 (weekly FLSA minimum) x 2 (weeks in a pay period) x 26.1 (pay periods per year) = $35,705
No employees will receive a decrease in base pay as a result of these changes.
If an A&P employee is reclassified to exempt, does this change how the employee will submit their timesheet?
No – timesheets for A&P employees will still be generated with scheduled hours prefilled for each day. A&P exempt employees will continue to enter any leave that needs to be approved but will no longer enter overtime or overtime compensatory leave for time worked over 40 hours in a workweek. A few employees remaining A&P nonexempt due to part-time status will continue to enter overtime leave and any overtime worked for approval.
A&P nonexempt employees moving to exempt with a balance of Overtime Compensation will have those hours paid out on the April 10, 2020 paycheck. Any balance of Straight-Time Compensation will be maintained and available for use in the future.