FLSA CHANGES – January 1, 2020
Changes to the Fair Labor Standards Act: Minimum Salary Level Threshold
On September 24, 2019, the U.S. Department of Labor (DOL) announced the Final Overtime Rule change which takes effect January 1, 2020. As a result, as of the pay period that begins on December 29, 2019, some ISU employees will have their job designations changed from exempt to nonexempt. The following points will help ISU supervisors and staff prepare for the changes.
Minimum Salary Threshold
- Since 2004, employees who make less than $23,660/year, ($455/week), have had their jobs designated as nonexempt.
- Effective January 1, 2020, the minimum salary level threshold will increase to $35,568, ($684/week).
- The minimum salary threshold cannot be pro-rated for part-time positions.
- There is an exemption to the minimum salary level threshold for positions that are involved in bona fide teaching/instruction of students.
- Employees who earn less than the new minimum salary level whose responsibilities do not include teaching/instruction of students, will have their positions re-designated as FLSA nonexempt due to these FLSA changes.
What Does Nonexempt Mean?
This re-designation will result in several changes for ISU employees whose jobs will be impacted:
- The right to receive overtime compensation (either as premium pay or in compensatory time off) at the rate of 1.5 times the regular hourly rate of pay for all hours worked in excess of 40 hours in the designated workweek.
- The requirement of keeping an accurate recording of all hours worked, per DOL guidelines. Most ISU employees will do this through BengalWeb. Nonexempt employees must be paid for all hours worked.
- A change to non-exempt status due to these FLSA changes will have no impact on a position being designated as non-classified or classified.
- Leave accrual rates as a result of these changes, (annual leave, sick leave), will remain unchanged.
- Employee Participation in a current retirement plan, (PERSI/ORP) will be unaffected by these FLSA changes.
As a Supervisor, What Are Some Things I should Be Thinking About?
Consider the effects of these regulations on the following and please contact your HR Consultant for additional information:
- Employees whose positions are non-exempt and who travel on University business will have time recording and potential cost implications.
- Scheduling work to remain within the 40-hour work week.
- The FLSA requires accurate time recording for nonexempt employees and that they be paid for all hours worked.
- Part-time employees that have not been accustomed to recording hours will now need to report time worked – and be paid for all hours worked during the workweek.
As a Supervisor, How Should I Respond to These Changes?
Some possibilities that may help you and your employee(s) include:
- Coordinating and scheduling travel in a way to most effectively use budgeted resources.
- Streamlining and/or reallocating work activities within the designated working hours.
- Coordinating with employees and/or proxy time reporters to ensure compliance with accurate time keeping requirements.
How Could Employees Perceive These Changes?
- Some affected employees may welcome the changes while others may be apprehensive or even upset about the change in FLSA designation.
- Be sensitive to the feelings of the employees whose jobs are already designated as nonexempt – this is not a demotion. The FLSA status of exempt or nonexempt refers to a legal designation of the employee’s job and is not a reflection on the importance of the position to the university.
Additional information regarding these changes is available at https://www.cupahr.org/advocacy/key-issues/flsa/. Please contact your HR Consultant for additional questions or concerns regarding these changes.