On November 22, 2016, a federal district judge issued a nationwide preliminary injunction blocking implementation of the change to the FLSA’s salary threshold for exempt employees. This means that employers are no longer required to meet the December 1, 2016 implementation deadline. The Department of Labor (DOL) will likely appeal the court’s order, but it is uncertain how long an appeal may take. At this point, UC Irvine will proceed with implementation as planned (see the page sections below for complete information.)
We will follow further developments on the status of the DOL’s overtime rule and communicate updates as they become available. Should you have questions, please contact your supervisor/manager or department HR or Academic Personnel representative.
On May 18, 2016, the U.S. Department of Labor (DOL) announced a change to the Fair Labor Standards Act (FLSA) which, among other things, sets overtime regulations for U.S. workers. The change affects who is eligible for exemption from the overtime provisions of the Act (also known as “exempt employees”.) On December 1, 2016, the salary threshold for white-collar exemptions to the FLSA will increase from $455 per week to $913 per week.
What does this mean for UCI employees? Some exempt monthly paid employees will no longer qualify for exemption from the FLSA and will become non-exempt biweekly paid employees. Here’s why. Currently, in order to be exempt from the FLSA, a position must generally satisfy three tests: (1) perform exempt duties, (2) be paid on a salary basis*, and (3) be paid at least $455/week. It’s the last of the three tests that is changing.
Starting December 1, 2016, to be exempt, a position must be paid at least $913/week. This means exempt employees who are paid below $913/week on December 1, 2016, will no longer qualify for exemption and will have to be reclassified to non-exempt. Under the FLSA, non-exempt employees are required to maintain records of all hours worked, which means these employees will have to complete timesheets. In addition, at UCI, non-exempt employees are paid on a biweekly basis (every two weeks) rather than a monthly basis (once a month.)
* Predetermined amount of compensation each pay period that generally cannot be reduced because of variations in the quality or quantity of the employee’s work.
The new FLSA salary threshold applies to both academic and staff employees*. The following exempt titles have pay range minimums that fall below the new FLSA salary threshold; therefore, these classifications and their incumbents will be reclassified to non-exempt.
*The salary level test does not apply to certain professionals, including: professors, lecturers, tutors and other teachers whose primary duty is teaching; athletic coaches and assistant coaches if their primary duty is teaching and instructing athletes; undergraduate/graduate students engaged in research or extracurricular activities as they are not considered by DOL as employees; doctors and attorneys.
PART-TIME EMPLOYEES BELOW THE NEW SALARY THRESHOLD
In addition to the titles mentioned above, part-time employees currently classified as FLSA exempt whose salaries fall below the new salary threshold of $913 per week will be reclassified to non-exempt. Actual salaries must be used. A calculator is provided to help part-time employees determine whether or not their salary falls below the new FLSA salary threshold.
|MONTHLY pay rate:|
|Appointment % time:
(between 1 and 100)
* See PPT for example calculations.