Frequently Asked Questions
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 are the current FLSA Regulations?
Under the current regulations, a position must satisfy three criteria to qualify as exempt from overtime:
- The incumbent in the position must be paid on a salaried basis (the salary basis test);
- The salary must be at least $684 per week or $35,568 annually (the minimum salary requirement or salary threshold); and
- The position’s “primary duties” must be consistent with executive, professional, administrative, and computer related positions as defined by DOL (the primary duties test).
Are faculty members or coaches impacted?
Teaching faculty will not be impacted. Teaching faculty are FLSA exempt, regardless of their annual/weekly salary, if their "primary duty is teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge." Typically coaches also qualify as FLSA exempt under this "teaching exemption" and will not be affected by the changes.
What is changing and why?
On April 23, the Department of Labor (DOL) issued the final rule to change the criteria that establishes whether employees are eligible for overtime pay. The rule increases the minimum salary threshold to $43,888 (or $844/week) on July 1, 2024, and then to $58,656 (or $1,128/week) on January 1, 2025. The rule also implements automatic updates to the threshold that will occur every three years. The duties test has not been changed.
Based on past lessons learned and in anticipation of lawsuits challenging the final rule, the University is planning a two-step implementation process.
Step 1: The University is committed to changing the minimum salary threshold from $35,568 to $43,888 on July 1, 2024, even if there is litigation challenging the new final rule.
Step 2: The University will monitor official announcements from the US Department of Labor and related regulatory bodies to determine if the salary threshold will increase on January 1, 2025. Once this determination has been made, OHIO will provide updates and guidance for next steps as more information becomes available.
What does it mean to be exempt or non-exempt?
Exempt (salaried) employees are excluded from receiving overtime pay. 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.
At OHIO, the majority of Administrative and Professional, Executive, and Faculty positions fall under the FLSA exempt category.
How do I determine if I’m an exempt or non-exempt Ohio University employee?
At Ohio University, exempt employees are paid semi-monthly and do not report time worked in Workforce, our time keeping system. Non-exempt employees are paid on a biweekly basis and enter hours worked into the Workforce timekeeping system.
How do I know if I am impacted by the proposed change?
If you are currently classified as "salaried" and your earnings fall below the new threshold amount, you may be affected by the proposed changes. The University is working to apply a consistent approach to these changes to ensure fairness within pay ranges. Therefore, even if you currently earn above the new threshold, you might still be impacted to maintain consistency within your pay range. This would be to ensure current, and potentially future employees, in the same position would have a consistent determination. University Human Resources will notify affected employees after the University has assessed the implications and communicated with University departments.
If I am impacted by this change, will my pay schedule change?
Impacted employees will switch from a semi-monthly to a bi-weekly pay schedule.
What is the difference between biweekly and semi-monthly pay?
Biweekly pay means employees are paid every two weeks, typically resulting in 26 pay periods per year. Semi-monthly pay means employees are paid twice a month, usually on specific dates such as the 15th and the last day of each month, resulting in 24 pay periods per year.
Will employee benefits change for positions that are reclassified to non-exempt?
Employees whose positions are reclassified to non-exempt will change to the appropriate leave accrual schedule. However, the annual accrual rates will not change.
What else will be impacted by this change for positions that are reclassified to non-exempt?
- Time Reporting: Non-exempt employees record all hours worked in WorkForce on a biweekly schedule. Applicable compensatory or overtime hours are recorded and paid accordingly.
- Overtime for Non-exempt employees: Non-exempt employees must record all hours worked, including overtime hours, and will receive additional pay for overtime. All overtime must be pre-approved by your supervisor.
What is considered overtime?
The hours an employee works over 40 hours in a workweek is called overtime. It is paid at a standard rate of time and a half or 1.5 times the standard hourly rate.
How and when will affected employees be notified of any changes?
With the changes to the eligibility criteria, an analysis is being conducted to determine the positions which may be impacted by the updated compliance standards. Human Resources will work with the University departments with exempt administrative employees to determine next steps on a case-by-case basis. Thereafter, the results will be communicated to the impacted employees.
If I am an employee with a salary over the new threshold, will I automatically remain an exempt employee?
While your salary exceeding the new threshold may indicate that you will remain an exempt employee, it's important to note that additional factors may influence your classification. The University is ensuring consistent application of these changes across pay ranges, which may impact your classification despite your salary level.
If I am an employee with a salary under the new threshold, do I have the option of remaining exempt?
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 employee choice. It is at the discretion of the organization with regard to each individual’s compensation, position responsibilities, position exemption status for positions with same or similar titles, and the new regulation. In order to be exempt from FLSA provisions (not eligible for overtime), employees must pass both the duties test and salary tests. If you do not pass these tests, you must be paid for overtime hours worked under the law. Exempt employees must also be paid on a salary, not hourly, basis.
Where can I get more information?
Complete information on the new rule is available from the Department of Labor’s Wage and Hour Division . Please contact Human Resources at 740-593-1636 or by email at UHR@ohio.edu . FAQs will continue to be updated as we learn more.