General Questions

The FLSA, administered by the Department of Labor, is a federal law that establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in the private sector and in Federal, State, and local governments.

Whether or not an employee is eligible for overtime pay is determined by the regulations in the Fair Labor Standards Act (FLSA). Non-Exempt employees must receive overtime pay at time-and-a-half for hours worked over 40 per week.

To determine if an employee is in an "exempt" status position, they must pass all three tests:

  1. Be paid on a fixed salary basis, not hourly;
  2. Duties must pass tests under executive, administrative or professional requirements; and
  3. Salary must be above the minimum threshold of $47,476 (effective December 1, 2016)

If any of these tests are not met, the employee shall be considered non-exempt, and eligible for overtime. Non-exempt employees must be paid for every hour worked.

On May 18, 2016 the U.S. Department of Labor issued a final overtime rule that changes the exempt employee minimum salary to $47,476 - more than double the old minimum of $23,660 - effective December 1, 2016. This salary minimum is scheduled to be updated every 3 years. There were no changes to the duties test.

Yes, this is a federal mandate and the university must comply.

Employees in job titles moving from exempt to non-exempt and employees in exempt job titles that need additional salary to meet the new threshold will be affected. Faculty positions are not affected by this FLSA change.

Human Resources Compensation is responsible for determining the exemption status for all jobs.

Yes. FLSA exemption status of staff jobs at the University of Louisville affects time reporting, pay frequency, overtime pay and starting leave accrual rates. For non-exempt job titles, all hours worked must be reported and pay is distributed bi-weekly.

The new ruling does not allow for prorated time. Part-time employees in a job title classified as exempt, but that do not meet the salary threshold of $47,476, must be considered non-exempt, report their hours and are eligible for overtime pay (straight overtime pay to 40 and time-and-a-half pay over 40). The hourly rate must be a minimum of $24.35 per hour, which is the hourly equivalent of the new threshold of $47,476. If the employee changes their standard hours there will be a review to determine if the exempt salary threshold is met or if the job title will remain non-exempt.

You can find complete information of the new rule on the Department of Labor's Wage and Hour Division website and the Human Resources FLSA Website. Please contact Business Operations at 852-7549 or businops@louisville.edu with any additional questions.

Transition from Exempt to Non-Exempt Questions

Impacted employees moving to non-exempt during this transition are "grand-fathered" in and will keep their current annual leave accrual rates, as long as they are in their current job title. In addition, they will also receive two personal days a calendar year (beginning January 1, 2017). For the remainder of 2016, one personal leave day will be given to be used from November 1 to December 31, 2016. Employees will want to note that personal days do not carry over like annual leave and are available on a calendar year basis. There will be no change to sick leave accruals because all employees receive the same accrual, regardless of exemption status.

Employees are only "grand-fathered" for their current job title. If the employee leaves that job title for any reason, they will no longer have the "grand-fathered" status, and will receive leave accrual rates based on their new job title's exemption. Examples:

  • A person moves from Job Title X in one department to Job Title X in another department on campus. Do they keep the "grand-fathered" status? Yes.
  • A person moves from Job Title X in one department to Job Title Y in another department on campus. Job Title Y is also non-exempt. Do they keep their "grand-fathered" status? No, they are no longer eligible for that status.
  • A person transitions to non-exempt in Job Title X, and then a year later is reclassified to Job Title Y, also non-exempt. Do they keep their "grand-fathered" status? No, they are no longer eligible for that status.

Employees changing exemption status will not have a change in their total pay for their standard hours worked. However, they do become eligible for overtime pay for any hours worked beyond their standard hour (straight overtime pay up to 40 hours and time-and-a-half for any hours over 40 in a workweek). The only other change will be to the pay schedule and the frequency of being paid. Non-exempt employees are paid bi-weekly.

An impacted employee's hourly rate is calculated by taking their annual pay rate and dividing it by their annual standard hours, based on 260 days. For example, an employee with a standard workweek of 37.5 hours would divide his/her annual pay rate by 1,950 to determine the hourly rate.

The last monthly pay date will be on November 30, 2016 for employees transitioning to non-exempt. This will be for the period of November 1-30. The first biweekly pay date, including eligibility for overtime pay, will be December 16, 2016 for the period of December 1 - 8.

No. All non-exempt positions at the University of Louisville must be paid on a bi-weekly basis.

New employees will accrue leave based on the exemption status of the job title (they are not eligible for "grand-fathered" leave accrual rates). Therefore, a new employee hired into a position (on or after December 1) that is changing to non-exempt will be eligible for the starting accrual rate of 10 days of annual leave.

Managers and supervisors will need to be mindful of potential changes in expectations and behaviors in order to manage hours within the department budget. It is important to clearly communicate these expectations up front to those changing to non-exempt to avoid unexpected overtime. Managers and supervisors will want to discuss expectations for obtaining approval for overtime, potential work schedule adjustments and clearly define timesheet procedures and deadlines.

Reporting Time and Overtime Pay Supervisor Questions

Non-exempt employees must record their daily in/out time, including lunchtime in/out, annual (vacation) leave, personal day and sick time usage. Supervisors are responsible for reviewing and signing all timesheets and will want to emphasize timesheet deadlines to newly non-exempt employees.

At the University of Louisville, non-exempt employees have standard hours of either 37.5 or 40 hours per workweek. For employees with standard hours of 37.5 hours per workweek, they are eligible to receive straight overtime pay (regular rate of pay) for any hours worked between 37.5 hours and 40 hours, and time-and-a-half overtime pay for any hours worked over 40 hours in a workweek. Employees with standard hours of 40 hours in a workweek are eligible to receive overtime pay at time-and-a-half for any hours worked over 40 hours in a workweek. Compensatory "comp time" cannot be used to offset any additional hours worked.

Yes. Using a mobile device to access work emails or phone calls after work hours is considered time worked (and potential overtime) and must be reported as such. To avoid unexpected overtime, set expectations with non-exempt employees about the use of these devices. Employees should not work on any device after their normal working hours, unless approved by the supervisor and the time is tracked and compensated.

Yes, UofL is required to comply with the FLSA and must pay overtime regardless of the source of funding.

Yes, if the part-time employee is in a job title classified as exempt, but does not meet the salary threshold of $47,476. They would be set up as non-exempt. Therefore, they must be paid a minimum of $24.35 per hour and must be paid for all hours worked. They are eligible for overtime pay (straight overtime pay to 40 hours and time-and-a-half pay over 40 hours.)

Yes. Supervisors can require overtime work when necessary. Any hours over 40 will be paid at time-and-a-half. Whenever possible, advance notice should be given.

Yes, non-exempt employees must be paid for all the hours worked, even if it was not pre-approved. Communication between supervisors and employees is key to avoiding this.

No. Overtime pay cannot be replaced by compensatory or "comp time" (unpaid time off in a different workweek). Adjustments to a schedule are allowed to remain below 40 hours, but can be done only in the same workweek (Friday through Thursday). Otherwise, all hours worked up to 40 should be paid straight overtime pay and any hours worked over 40 in a workweek must be paid at time-and-a-half.

The employee can be paid overtime for the hours worked, if it exceeds 40 hours, or supervisor approved adjustments can be made to the employee's schedule during that same workweek. For example, if there is a four-hour event on a Tuesday evening, the supervisor can let to leave 4 hours early the next day or two hours early the next two days. Remember though, adjustments to a schedule can only occur during the same workweek, Friday through Thursday.

Yes. It is at the supervisor's discretion to allow adjustments as long as it is within the same workweek. For example, if an employee typically works 7.5 hours a day and has an appointment that would only allow them to work 6 hours one day, the supervisor and employee can agree that the employee will make up the hour and a half a different day in the same workweek. Take into consideration that a non-exempt workweek at the university is Friday through Thursday (not Monday through Friday) when making alternative schedules. Another example would be an employee who has worked 8.5 hours a day Friday, Monday, Tuesday and Wednesday for a total of 34 hours. The supervisor can allow them to leave early on Thursday to avoid going over 37.5 or 40 hours in that workweek. Remember, this can only be done during the same workweek. Adjustments cannot be made outside of the current workweek.

Yes, there is no prohibition on traveling or professional development. 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. Non-exempt employees need to be mindful of what hours to report while traveling.

Lunch periods are required if an employee works 5 consecutive hours. This time taken must be reported on the timesheet. Non-exempt employees are eligible for a 30-minute uninterrupted lunch break.

Occasionally there may be a work situation where a supervisor will need to approve a non-exempt employee to work through lunch. The non-exempt employee must be paid for that lunch time.

Yes, non-exempt employees are eligible for two 15 minute breaks. These breaks cannot be combined, taken with the lunch break, or used to shorten the workweek. They should not be reported on the timesheet.