• What is the Fair Labor Standards Act (FLSA)?

    The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting all United States employees in the private sector and in Federal, State, and local governments, including Higher Education.  Employees are either “exempt from overtime” or “non-exempt from overtime” pay based on FLSA regulations.  The U.S. Department of Labor (DOL) administers the FLSA regulations. 

  • What does it mean to be exempt or non-exempt?

    Exempt (salaried) employees are excluded from receiving overtime pay regardless of the number of hours they work in any given week.  Non-exempt (hourly) employees are required to be paid overtime (at a rate of one and one-half times their regular rate of pay) for any hours worked in excess of forty hours in a seven day workweek as defined by their employer.  Wright State University defines its seven day workweek as midnight Friday through midnight the following Friday.   For an employee to be considered exempt, FLSA established specific guidelines for select positions, such as teaching, and three tests that had to be met for majority of occupations.

  • What are the tests to determine if an employee is considered exempt?

    The following three tests must be met for an employee to be considered salaried (exempt from overtime). If any of the three is not met, the employee would be classified as hourly (non-exempt):

    • Salary Basis – employee must be paid on an annual salary basis, and
    • Salary Level – employee must be paid equal to or above a salary threshold amount that was recently established at $47,476 annually (previously $23,660), and
    • Job Duties – employee must qualify as an executive, administrator or professional employee.
  • How do the terms “exempt” and “non-exempt” intersect with the terms “classified” and “non-classified”?

    The terms “exempt” and “non-exempt” originated from Federal law and are used to designate overtime eligibility. “Classified” and “non-classified” originated from State law and designate appeal rights to the State Personnel Board of Review (SPBR). At Wright State, classified and unclassified hourly employees are considered “non-exempt” per federal law, and unclassified salaried employees are considered “exempt” per federal law.

  • What is changing and why?

    On May 18, 2016, a final ruling was issued by the DOL to change the criteria that establishes whether employees are eligible for overtime pay.

    The final rule focuses primarily on updating the salary level needed for employees to be exempt from overtime.  The duties test has not been changed.

    Based on regulations from 2004, in order for employees to be exempt from overtime requirements, they had to meet certain job duties-related tests and be paid on a salary basis at a rate of at least $455 per week ($23,660 per year).

    The new rule more than doubles the salary threshold to $913 per week ($47,476 per year).

    In addition, the new regulations include a mechanism for automatically updating the salary level every three years, with the first update taking place on Jan. 1, 2020.

  • Are there any provisions for higher education institutions?
    • Teachers: Teachers are exempt from overtime regardless of the salary threshold if their primary duty is teaching, tutoring, instructing or lecturing.  Teachers include professors, adjunct instructors and teachers of skilled and semi-skilled trades and occupations.
    • Coaches: Coaches are typically exempt if their primary duty is teaching, which may include instructing athletes in how to perform their sport.
    • Students: Graduate and undergraduate students are exempt from overtime if they are engaged in research, their primary duty is teaching or serving as a teaching assistant, or students who serve as resident advisors in exchange for reduced room and board or tuition credit.
    • Academic Administrative Personnel: Department heads, academic counselors and advisors, intervention specialist and others with similar responsibilities who are paid at least as much as the entrance salary for teachers at their institution.  This provision is institution specific and not applicable for Wright State Employees.
  • When is the effective date of the new rule?

    All changes will be effective December 1, 2016.

  • How many WSU employees will be affected by the new ruling?

    Approximately 300 unclassified salaried (exempt) staff employees, including research employees, will be affected due to their annual salaries falling below the new salary threshold.

  • Who will be affected at WSU?

    These changes will only affect unclassified salaried employees (exempt) whose annual salary no longer meets the FLSA salary test.  Prior to December 1, 2016, if you are a unclassified salaried employee (exempt from overtime) and you earn less than $913 per week ($47,476 per year), you may be converted to a unclassified hourly employee (non-exempt).  Unclassified hourly employees (non-exempt) are eligible to receive overtime pay at the rate of one and one-half times the hourly rate of pay for time worked over 40 hours within a WSU’s defined workweek.

  • Will my benefits change?

    No, your benefits will not change; however, if you become an hourly employee, you will be paid bi-weekly rather than monthly, and therefore, you will accrue vacation and sick time based on this new pay period. In addition, your benefit deductions, although the same amount, will occur twice a month instead of monthly.

  • What else will be impacted by this change?

    Anyone who moves from unclassified salary to unclassified hourly will need to begin completing an electronic bi-weekly time sheet, which subsequently is approved by your supervisor before submission to payroll.  You will no longer need to complete the Leave Report.

    Overtime will be paid for any hours exceeding 40 hours within the workweek.

    All overtime must be pre-approved by your supervisor. Failure to receive permission before working overtime may result in disciplinary action.

  • How does the proposed rule change affect staff members who work less than full time?

    The FLSA regulations are based on how much an employee is paid on an annual basis.  For example, an employee is working at 50% FTE, earning $30,000 annually.  This employee’s pay would be below the newly established threshold of $47,476, therefore, becoming overtime eligible.

    In other words, there is no provision within FLSA to annualize the salary to $60,000, as if the employee was working 100%.

  • Can employees opt out of this change if they want to continue to be considered a salaried or exempt employee?

    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 option.

  • Can a non-exempt employee still work early and late? Can a non-exempt employee check messages from home after work hours?

    The change of moving from salaried (exempt) to hourly (non-exempt) is focused on ensuring work hours are reported and paid, not when they are worked. Hourly employees (non-exempt) can still request alternative scheduling arrangements with their managers; however, all time worked must be recorded within the timesheet. All current and future alternative scheduling arrangements will have to be revisited with your management, with an understanding as to when overtime is permissible.

  • Will some employees receive a pay increase for the purpose of maintaining the employee’s exempt status?

    WSU will continue to follow their existing process for pay adjustments. There is no additional funding to accommodate this FLSA rule change.

  • Can non-exempt employees still attend professional conferences?

    Yes, hourly (non-exempt) employees must account for the travel time and for the hours of conference attendance, but there is no prohibition on traveling or professional development.

  • How will I know if I am affected?

    Human Resources is engaging leadership throughout Wright State regarding impacted employees. Eventually, you will receive notification from Human Resources if your status changes from salaried to hourly.

  • Where can I get more information regarding the changes?

    Information on the new rule is available on the HR Website and includes links to various sources including the Department of Labor’s Wage and Hour Division.  In addition, you may contact any member of the HR Compensation team at Hr-Compensation@wright.edu.

  • Will the changes affect the Total Compensation Study that is currently in process?

    Part of the Total Compensation Study’s comprehensive evaluation of each unclassified position has always been determining if the position is correctly classified as salaried or hourly in accordance with the FLSA. The compensation guidelines will be updated to include the new salary level requirements. Procedures and policies will also be put into place to address the automatic salary level increases that will occur every three years.