New Overtime Rules effective December 1, 2016
On May 18, 2016, The U.S. Department of Labor (DOL) announced the release of the Department of Labor’s final rule updating the Fair Labor Standards Act. This Act, often called the Overtime Law governs overtime regulations and set requirements for jobs that are exempt (not eligible for overtime) and non-exempt (eligible for overtime).
This change affects some Lander University employees. This new rule will increase the minimum salary requirement for employees to be considered exempt. These new changes will become effective December 1, 2016. Under the new rules, employees must be classified as non-exempt and eligible for overtime pay if their annual salary is below $47,476 ($913 per week), up from the previous threshold of $23,660 per year ($455 per week). Please note the new FLSA rules do not affect teachers, physicians and attorneys.
Employees must meet the new salary threshold AND pass the duties test for the specific exemption. Non-exempt jobs are eligible for overtime; therefore, employees must report all hours actually worked. Overtime pay or compensatory time is given to employees whose actual work exceeds 40 hours in a week. Employees must receive approval from the authorized supervisor prior to working overtime or they may be subject to disciplinary action.
Overtime pay is 1.5 times the regular hourly rate. Compensatory time is earned at 1.5 hours for each hour worked over 40. Leave time taken does not count as time worked when calculating overtime. At Lander University, SC Code of Laws Section 8-11-55 allows the payment of compensatory pay in lieu of overtime pay for state agencies.
To reduce overtime, pay, supervisors can adjust an employee’s schedule within the same workweek so that no more than 40 hours is worked. Supervisors cannot require employees to work and not report the work hours. Some call this "working off the clock" and it is against the law.
FAQs, Training, and Resources Available
The following resources are provided to help supervisors, managers and employees understand the new FLSA changes.
- Revised Policy on Minimum Wage, Overtime, and Compensatory Time
- Comp Time Authorization Form
- FLSA PowerPoint Presentation to Supervisors/Managers – This power point presentation provides a brief overview of the changes, requirements, exemptions, and penalties employers face when they violate FLSA regulations.
- The Manager’s Help Guide to FLSA – This resource guide provides managers and supervisors suggestions for supporting your employees through the implementation of new FLSA changes.
- FLSA FAQs for Managers – This guide provides managers an overview of the Frequently Asked Questions regarding the FLSA changes.
- Reminders for Nonexempt Employees – This is a good reference that provides quick facts employees need to know about what is and is not reportable time, how to property report time, how time it is earned, taken, and paid.
- Compensatory Time and Overtime Pay FAQs – Some employees may be compensated for overtime with paid time off from work (compensatory time) instead of wages. Review these FAQs for answers about compensatory time.
- FLSA at a Glance - Work Time vs Non-Work Time – Use this chart to learn if specific activities such as breaks, lunch hours and travel time are considered time worked.
- Travel Time Guidelines – Learn how to properly account for and report travel time.
- FLSA: Exemption Test Questionnaires – Employees who earn more than $47,476 per year may be considered exempt, if they pass the “duties test”. Use these questionnaires to help determine the correct exemption status. Note: The new overtime rules do not include any changes to the “duties test”.
Human Resources will be conducting supervisor training. For immediate questions about the new regulations, please contact Jean Langrehr at 864.388.8057 or email firstname.lastname@example.org.
Department of Labor Resources
The Department of Labor has prepared the following resources to help you better understand the new overtime rules and how they affect higher education institutions.
All non-exempt employees employed by Lander University must receive at least the current minimum wage which is $7.25 per hour. Compensation is based on working 40 hours per week or 2,080 hours per year for 12 month employees.
The workweek is 7 consecutive 24 hour periods. Lander’s workweek begins at 12:01 a.m. Saturday and ends at midnight the following Friday. Each workweek stands by itself in determining overtime compensation for non-exempt employees. Law enforcement work a 14-day period or 80 hours.
While the official university workweek is based on 37.5 hours, employees shall not receive additional compensation or compensatory time for hours worked between 37.5 and 40 per workweek. Any employee is required to work 40 hours per workweek without additional compensation or compensatory time.
Recording Actual Time for Hours Worked
Hours worked includes all time an employee is required to be on duty or on the University’s premises or at a prescribed work place for the university, and all time during which the employee worked or is permitted to work for the university.
Supervisors cannot require employees to work and not report the work hours. Some call this "working off the clock" and it is against the law.
Employees should report actual hours worked and the all leave taken. If an employee actually worked 9 hours you must record 9 hours. Or if an employee actually worked 4 hours and took 3.5 hours of leave, then 4 hours worked and 3.5 hours of leave must be recorded.
Breaks, Lunch, and Travel Time
- Employees who work 37.5 hours a week actually get paid for 40 hours, therefore overtime pay or compensatory time does not start until employees have actually worked over 40 hours.
- Breaks, even for a meal, are not required by the law. However, brief 5 to 15 minute breaks that are allowed by the supervisor count as time worked.
- If a break or meal period is allowed for 30 minutes or more, and the employee does not do any work during that time, it does not count as time worked.
- Home to Work Travel: An employee who travels from home before the regular workday and returns to his/her home at the end of the workday is engaged in ordinary home to work travel, which is not work time.
- Travel That is All in a Day's Work: Time spent by an employee in travel as part of their principal activity, such as travel from job site to job site during the workday, is work time and must be counted as hours worked.
- Home to Work on a Special One Day Assignment in Another City: An employee who regularly works at a fixed location in one city is given a special one day assignment in another city and returns home the same day. The time spent in traveling to and returning from the other city is work time, except that the employer may deduct/not count that time the employee would normally spend commuting to the regular work site.
- Travel Away from Home Community: Travel that keeps an employee away from home overnight is travel away from home. Travel away from home is clearly work time when it cuts across the employee's workday. The time is not only hours worked on regular working days during normal working hours but also during corresponding hours on nonworking days.
- Time spent in travel away from home outside of regular working hours as a passenger on an airplane, train, boat, bus, or automobile is not work time if not performing work duties.
- Lectures, Meetings and Training Programs: Attendance at lectures, meetings, training programs and similar activities need not be counted as working time only if four criteria are met, namely: it is outside normal hours, it is voluntary, not job related, and no other work is concurrently performed.