Transcript Slide 1

Fair Labor Standards Act
(FLSA) Education
May 2005
Revised February 2006
Today’s Facilitators

Jami Painter, University Office of Human
Resources – [email protected]
Campus Human Resources Representative
 Joyce Winn, University of Illinois at Chicago,
Academic Human Resources [email protected]
 Debi Stone, University of Illinois at UrbanaChampaign, Academic Human Resources –
[email protected]
 Patti Sims, University of Illinois at Springfield,
Human Resources – [email protected]
Today’s Objectives
To provide education about the Federal
FLSA law and regulations.
 To provide an overview of the University’s
review process.
 To provide a summary of the impact on
affected employees.
 To provide an overview of the reporting
and record retention process for
employees changing from exempt to
salaried non-exempt status.
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FLSA – Background
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Fair Labor Standards Act (FLSA)
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Established in 1938 by the Department of Labor (DOL)
Purpose
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Establishes standards for:
 Minimum Wage
 Overtime Pay
 Child Labor
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DOL first issued exempt status regulations in 1940
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Last modification in 1954
Recent regulation revisions effective August 23, 2004
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Section 541 (29 CFR 541 et al) – White Collar Exemptions
FLSA - Background
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FLSA generally requires that employees be
paid:
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At least federal minimum wage of $5.15 per
hour (Illinois law is $6.50 per hour)
Overtime premium pay of time-and-one-half of
the employee’s regular rate of pay for all hours
worked over 40 in a workweek for employees
in hourly non-exempt status.
Overtime premium pay of one-half of the
employee’s regular rate of pay for all hours
worked over 40 in a workweek for employees
in salaried non-exempt status.
White-Collar Exemptions
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White-collar exemptions allow for
exemptions from these requirements.
Salary Test
1. Employee must be paid at least a certain
compensation level;
2. Employee is paid on a salary ,rather than
hourly, basis; and
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Duties Test
3. Employee performs certain exempt duties.
White Collar Exemption
Requirement #1 (Salary Test)
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Salary level
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Minimum paid must = $455 per week or more.
If paid less than $455 per week, cannot be
exempt even if he/she meets the duties
test.
If paid $455 per week or more, can be exempt
only if he/she also satisfies the duties test.
Salary cannot be prorated based on FTE.
White Collar Exemption
Requirement #2 (Salary Test)

Form of payment
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Employee must be paid a flat salary, not by the
hour (Academic Monthly Salary)
Employee must regularly receive a
predetermined amount that cannot be reduced
because of variations in the quantity or quality
of work performed
White Collar Exemption
Requirement #3 (Duties Test)
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FLSA, Section 12(a)(1) provides
exemption from minimum wage and
overtime pay for bona fide employees in
the following areas:
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Executive
Administrative
Professional
Outside Sales
Highly Compensated
Section 13(a)(17) also exempts certain
computer employees.
University Review
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Two cross-campus committees formed
Summer of 2004.
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Academic
Civil Service
Representatives from University Human
Resources, Campus Human Resources,
Legal Counsel, Provosts Offices
 Seyfarth Shaw Attorneys, LLP

Civil Service Review
Salary Test
 All exempt Civil Service employees satisfied the
salary test ($455/week) based on Banner report
Duties Test
 All Civil Service classifications were examined for
duties test compliance.
 In depth review of job descriptions, SUCSS
classifications, and work performed was
conducted for several classifications. Some of
these included:
 Admissions and Records
Officer II
 Events Administrator
 Information Supervisor
 Budget Analyst I
 Space Administrator III
 Graphic Designer II
 Assistant Program
Director
Civil Service – Duties Test
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Selected classification review
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State Universities Civil Service System
classification review against FLSA regulations
Job description review against FLSA
regulations
Interviews with supervisors/department heads
to evaluate work performed against FLSA
regulations
All Civil Service classifications currently
classified as Exempt met the duties test
for FLSA exemption.
Academic Review
Salary Test
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Banner report identifying all Academic
employees compensated below the $455/week
minimum
Total number of Academic employees
University wide not meeting salary test = 152
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UIC – 90
UIS – 17
UIUC – 45
Academic – Duties Test
Duties Test
 Banner report identifying all Academic employees
(job titles and positions)
 Review conducted of all Academic positions.
 In depth review (job descriptions reviewed and
interviews with supervisors/department heads)
based on legal counsel recommendations and
peer institution reviews, for the following
positions:
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Assistant Coaches
Resident Directors
Graduate Assistants
Academic – Duties Test Results
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The following positions met the duties
test for FLSA exemption:
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Assistant Coaches
Resident Directors
Some individuals in these positions may
not have met the salaries test, and
therefore, cannot be classified as FLSA
exempt.
Graduate Assistants –
Duties Test Results
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The following assistantship positions met
the duties test for FLSA exemption:
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Teaching Assistants (TA)
Research Assistants (RA)
Para-Professional Assistants (PGA)
TA, RA, and PGA position’s primary role is
that of student, not employee, so the
salary test is not required.
Graduate Assistants –
Duties Test Results
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Graduate Assistants (GA) did not meet the duties
test and must be classified as salaried nonexempt
Re-classification as salaried non-exempt
employees will be effective 8/16/05
Approximate number of GA’s University wide not
meeting duties test for 2004-2005 Academic year
= 756
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UIC – 173
UIS – 160
UIUC – 423
2005-2006 Academic year totals for GA’s may
vary
Final Review - Counts
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Civil Service – Zero employees will be changed
from exempt to salaried non-exempt based on
the salary and duties test.
Academic Professionals (AP)
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152 employees will be changed from exempt to salaried
non-exempt status based on the salary test.
Zero employees will be changed from exempt to salaried
non-exempt based on the duties test.
Graduate Assistants (GA) – 756 employees for
the 2004-2005 Academic year would have been
changed from exempt to salaried non-exempt
status based on the duties test.
Salaried Non-Exempt
Employees
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What will change?
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Eligibility for overtime compensation
Tracking hours worked
When will the change be effective?
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On August 16, 2005, the following will occur:
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Exempt Indicator on NBAPOSN in Banner changed
by Campus HR for individuals identified from the
review who are going from exempt to salaried nonexempt status
Academic Professionals not meeting salary
requirement begin tracking hours
Graduate Assistants (GA’s) begin tracking hours
Eligibility for Overtime
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Compensation
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Paid predetermined salary on a monthly basis
(Academic Monthly Payroll)
Eligible for overtime pay at one-half the hourly
rate for all hours worked over 40 for each
workweek
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Compensatory Time
Monetary Compensation
Compensation
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Compensatory Time
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Employees discretion
Used at one-half time the number of hours
worked over 40
At time of termination/separation, paid out all
unused compensatory time at one-half the
regular hourly rate at the time of
termination/separation
Balances and usage maintained within the unit
Maximum compensatory time accumulation
allowed = 240 hours
Compensation
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Monetary Compensation
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Paid at one-half the regular hourly rate (fullrate may be found on NBAJOBS, Job Detail
Screen, Rate field)
Paid in the form of an adjustment on the job
that the overtime was worked, following the
end of the pay period in which the overtime
was worked
Overtime paid in increments of 15 minutes for
hours worked over 40 in a work week
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0-7 minutes = 0
8-22 minutes = 15 (.25)
23-37 minutes = 30 (.5)
38-59 minutes = 45 (.75)
Overtime Payment
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Overtime compensation in the form of pay
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Process as an adjustment
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Earning code = ADD
Include dollar amount on monthly job
Comment field = FLSA OT
Adjustment must be processed and paid within
13 days of the end of the pay period
Job Aid to assist with performing an
adjustment can be found at
http://www.obfs.uillinois.edu/jobaids/DTE_Pay
rollAdjustments.doc
Tracking Hours
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Academic Salaried Non-Exempt employees
will track hours on the FLSA Salaried NonExempt Academic Timesheet (Excel
spreadsheet)
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Form is available in NESSIE, HR Forms section,
at
https://nessie.uihr.uillinois.edu/cf/index.cfm?it
em_id=161
Form may be downloaded and saved to
personal desktop/folder for each employee.
FLSA Salaried Non-Exempt
Academic Timesheet
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Report total hours worked per day
Automatic Calculations
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Hours worked over 40 in each workweek
Number of hours due to employee in the form of
comp time or overtime payment for each monthly
pay period
Employee and Supervisor signature required
on all timesheets in which overtime hours were
accrued
Units may choose to collect employee
timesheets and signatures for all months for
documentation and retention purposes
Spreadsheet/paper form retained in the unit
FLSA Salaried Non-Exempt
Academic Timesheet
Hiring Salaried Non-Exempt
Academic Staff
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DART calculator will be available to
determine if employee meets the
minimum salary test
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Administrative Applications section in DART
FLSA exemption status should be determined
BEFORE a verbal or written offer is made
Unit enters annual salary and number of
months of service; calculator displays weekly
salary
Until calculator is available, units may
manually determine the weekly salary by using
this formula: Annual Salary / # Mo Paid /
4.333 = Weekly Salary
Hiring Salaried Non-Exempt
Academic Staff
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Banner Position Creation and Maintenance
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Exempt Indicator defaults from the p-class
Confirm Exempt Indicator box in NBAPOSN is
not checked
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If checked, uncheck the field
Employees utilizing same p-class may have
different FLSA exemption statuses because of
weekly salary
Banner FLSA Indicator
Campus Human Resources will fix FLSA
Indicator for Academic employees
identified during the review
 Beginning August 16, 2005, units will be
responsible for ensuring FLSA status is
correct (UIC and UIUC only)
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Academic Exempt Reporting
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Applies to the following employee groups:
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Academic Professionals (AP) who meet the
$455 salary requirement
Faculty
Teaching Assistants (TA)
Research Assistants (RA)
Para-Professional Assistants (PGA)
Post-Doc Research Associates/Interns
Academic Exempt Reporting
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Report absences in four (4) and eight (8) hour increments
only.
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Part-time Academic employees report in half- and full-day
increments based on their work schedule.
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Employees may not accumulate time over multiple days to
reach the 4 and 8 hour increments.
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Example: an employee who works six hours per day would report
in three and six hour increments.
Example: an employee who is absent two hours on Monday and
two hours on Tuesday does not report four hours of absence.
Absences of less than 4 or 8 hours per day are not reported
against vacation or sick leave usage.
Exempt employees are still expected to be available for
customers/clients and perform their work responsibilities
above and beyond the normal University workweek, in
order to fulfill their professional responsibilities.
Summary
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No Civil Service employees will be changed from exempt to
non-exempt
All Academic Professional employees not meeting the
minimum salary requirement ($455/wk) and all Graduate
Assistants (GA’s) will be changed from exempt to salaried
non-exempt status effective August 16, 2005
Academic Professionals not meeting salary requirement and
all GA’s will begin tracking hours on FLSA Salaried NonExempt Academic Timesheet August 16, 2005
Units responsible for determining FLSA exemption status
and verifying FLSA Indicator in Banner August 16, 2005
(UIC and UIUC only)
Exempt Academic employees report absences in 4 and 8
hour increments only (full- and half-day for part-time
employees)
Online Resources
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FLSA Information and Resources
https://hrnet.uihr.uillinois.edu/dart-cf/index.cfm?Item_id=2734
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FLSA Salaried Non-Exempt Academic Timesheet
(NESSIE HR Forms, Policy/Labor, and Leave
sections)
https://nessie.uihr.uillinois.edu/cf/index.cfm?item_id=161
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Pay Adjustment Job Aid
http://www.obfs.uillinois.edu/jobaids/DTE_PayrollAdjustments.doc
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2006 Payroll Schedule
http://www.obfs.uillinois.edu/earnings/2006payrollschedule.xls
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DART Administrative Applications
https://eas.admin.uillinois.edu/eas/servlet/EasLogin?redirect=http
s://hrnet.uihr.uillinois.edu/dart-cf/admin/index.cfm
Fair Labor Standards Act
QUESTIONS?