FLSA Toolbox

 

Federal Overtime Rules

It is the policy of The University of Texas at Dallas to comply with the Fair Labor Standards Act (FLSA [Fair Labor Standards Act] ), as amended. The FLSA [Fair Labor Standards Act] establishes the federal minimum wage, overtime regulations, child labor regulations and related record keeping requirements for employers.

UT Dallas FLSA [Fair Labor Standards Act] Policy (UTDBP3051)

With regard to overtime regulations, an employee may be exempt from overtime pay if they qualify for one of the white collar exemptions. To qualify, an employee must pass three tests:

 

  • Salary Basis Test: employee receives a fixed salary each week that is not subject to reduction because of variations in the quality or quantity of work.
  • Minimum Salary Test: employee receives a minimum salary —currently at $23,660.
  • Job Duties Test: employee performs work that primarily involves certain executive, administrative, or professional duties.

To see if a position is non-exempt (eligible for overtime), please refer to the Classified Pay Plan and Salary Guides.

Frequently Asked Questions

 

What is the Fair Labor Standards Act (FLSA [Fair Labor Standards Act] )?

The Fair Labor Standards Act is a federal law that is enforced by the US Department of Labor (DOL [Department of Labor] ). The FLSA [Fair Labor Standards Act] defines the federal minimum wage, employee time recordkeeping requirements, and jobs required to receive overtime compensation after 40 hours have been worked in a work week.

The University administers compensation in compliance with the FLSA [Fair Labor Standards Act] .

 

What do the terms “exempt” and “non-exempt” mean?

Positions that are not covered by the overtime provisions of the FLSA [Fair Labor Standards Act] and are, therefore, not eligible for overtime pay / compensatory (comp) time for hours worked over 40 hours / work week are considered “exempt”. Position that covered by the overtime provisions of the FLSA [Fair Labor Standards Act] and are, therefore, eligible for overtime pay / comp time for hours worked over 40 hours / work week are considered “non-exempt”. A non-exempt employee must track their hours worked and are compensated (overtime pay / comp time) for any hours worked over 40 hours / work week at the rate of time and one-half.

 

Why is the Fair Labor Standards Act (FLSA [Fair Labor Standards Act] ) important to the University?

The University is covered by the Fair Labor Standards Act (FLSA [Fair Labor Standards Act] ) which requires that certain employees receive overtime pay / comp time for any hours over 40 worked / work week. It is our responsibility as an employer to make a good faith effort towards compliance in an effort to not only mitigate risks in the form of financial penalty, but also as a means to ensure that our employees are treated fairly and receiving the wages they earn.

 

What happens if the University is not in compliance with these requirements?

All employers must make good faith efforts to be in compliance. Employers who willfully fail to comply may be subject to substantial financial penalties.

 

Who is impacted by this rule?

This rule applies to all staff positions in both the academic and administration area. Faculty are exempt under the teaching exemption.

FLSA [Fair Labor Standards Act] does not apply to student positions.

 

What are the criteria used to determine if a position can be classified as exempt?

The FLSA [Fair Labor Standards Act] criteria are determined by applying three tests:

  • Salary Basis Test: employee receives a fixed salary each week that is not subject to reduction because of variations in the quality or quantity of work.
  • Minimum Salary Test: employee receives a minimum salary —currently at $23,660.
  • Job Duties Test: employee performs work that primarily involves certain executive, administrative, or professional duties.

All three test must be satisfied to meet the criteria for exemption.

 

If an employee’s job was classified as exempt and is reclassified to non-exempt, will this transition mean a change in titles?

In general, the non-exempt employee’s job title will not change. However, if it is determined that the non-exempt employee’s particular work structure or job duties do not align with their current job title, a change may be necessary.

 

If an employee’s job is changed to non-exempt, how will they be transitioned to time and labor?

When it is determined that a job should be changed to non-exempt, the employee will receive time and labor training to understand how to enter hours worked. The pay group will be changed to the non-exempt pay group. The employee will then be required to accurately track their time as a non-exempt employee.

 

Will a non-exempt employee be allowed to work a flex schedule?

The rule does not define work schedules. It is the manager’s / supervisor’s responsibility to manage the schedules of their department. The manager / supervisor must ensure that non-exempt employees, regardless of their schedule, track their hours worked and are compensated (overtime pay / comp time) for any hours worked over 40 hours / work week.

 

What is UTD’s work week?

The official UT Dallas work week begins at 12:01 a.m. Sunday, and ends at 12:00 midnight the following Saturday. There are limited exceptions for alternative work week schedules for certain service groups.

 

Will employees have the option of accruing compensatory time rather than taking pay at the overtime rate?

Comp time is the default for overtime at UTD. Any overtime hours worked will automatically be designated as comp time. Comp time may be accrued; however, it must be used within one year from the time in which it was earned. A manager / supervisor may elect to pay the overtime if the needs of the department does not allow for additional time off.

 

If a non-exempt employee, who is scheduled to work 8:30 to 5:00, takes a short lunch break and / or comes in early to finish a project, are they eligible for overtime pay / comp time?

If the total hours worked are greater than 40 hours / work week.

 

If a non-exempt employee is willing to volunteer to work additional hours without compensation, are they still eligible for overtime pay / comp time?

Non-exempt employees should be compensated for all work performed. Overtime pay / comp time must be paid if the total hours worked are greater than 40 hours / work week.

 

If a non-exempt employee continues to work overtime without prior approval, are they still eligible for overtime pay / comp time?

The manager / supervisor should be sure to communicate expectations relating to work hours and overtime to all non-exempt employees. If the non-exempt employee needs additional time to complete work during the work week, they should receive approval from their manager / supervisor prior to working any overtime hours. Should the non-exempt employee have a pattern of working extra hours without approval, the actions may be addressed through the disciplinary process.

 

Is a non-exempt employee eligible for overtime pay / comp time if they work more than eight (8) hours on a particular day?

Overtime (OT) is calculated on a weekly basis. As long as the employee does not work greater than 40 hours / work week, an employee can work an alternate work schedule.

 

Should a non-exempt employee continue to work while they are having their meal break?

A non-exempt employee is not considered to be completely relieved from duty if they are performing any duties or do any work while taking a meal break. Therefore, if an employee is performing any work while on their meal break including, but not limited to, answering phones and emails, scheduling travel, or composing letters, then they will need to be compensated for that time. Non-exempt employees are expected to take their work and meal breaks away from their desk or assigned work area.

 

How should a manager / supervisor manage the difference between exempt and non-exempt employees?

Managing work hours for exempt and non-exempt employees is the responsibility of the manager / supervisor and the employee. In an effort to minimize creating an environment where employees feel as if they are being treating differently, a manager should consider:

  • Ensuring the employee knows that they are valued no matter their FLSA [Fair Labor Standards Act]  status.
  • Communicating that FLSA [Fair Labor Standards Act] status is not a value judgment and will not impact their contribution toward accomplishing work goals.
  • Requiring exempt employees to keep regular schedules. This is not the same as requiring them to track their schedule, but rather ensuring they work a consistent schedule.
  • Ensuring that all employees are aware of the overtime guidelines and expectations.

 

What are the employee’s and the supervisor / manager’s responsibilities in reporting hours worked for non-exempt employees?

Non-exempt employees should be advised of the expectation of keeping track of their hours worked and adherence to the assigned work schedule as part of their departmental on-boarding process for new hires. Managers / supervisors are responsible for managing the work schedule and approving the hours worked. If the employee fails to comply and report hours worked appropriately, the matter can be addressed via the disciplinary process. The timesheet should reflect an accurate account of times when the schedule was flexed or changes were made to avoid overtime. Keeping track of the hours worked will minimize any discrepancy in the amount of hours worked or paid.

 

How often should a manager / supervisor review an employee’s documented hours worked?

Managers should review the work hours for non-exempt employees on a weekly basis to manage any potential overtime or comp time accruals. Reviewing the time worked routinely allows the manager / supervisor to make adjustments to the work week, flex the work schedule to avoid overtime, or to determine if overtime will be necessary based on work load and needs of the department.

 

Can a department allow an employee to flex their work hours to avoid accruing overtime within the work week?

Yes. It is the supervisor / manager’s responsibility to organize work schedules that best fulfills the needs of the department. In situations where additional work hours are necessary, the supervisor / manager can use flex schedules to minimize or eliminate the use of overtime. For example, an employee may work two additional hours to assist with a student event. The manager / supervisor may ask the employee to start the next work day two hours later.

Terminology

 

Customarily Acquired by a Prolonged Course of Specialized Intellectual Instruction: professions where specialized academic training is a standard prerequisite for entrance into the profession. The best evidence of meeting this requirement is having the appropriate academic degree. However, the word “customarily” means the exemption may be available to employees in such professions who have substantially the same knowledge level and perform substantially the same work as the degreed employees, but who attained the advanced knowledge through a combination of work experience and intellectual instruction. This exemption does not apply to occupations in which most employees acquire their skill by experience rather than by advanced specialized intellectual instruction.

Customarily and Regularly: greater than occasional but less than constant; it includes work normally done every work week, but does not include isolated or one-time tasks.

Discretion and Independent Judgment: the comparison and the evaluation of possible courses of conduct and acting or making a decision after the various possibilities have been considered. The term implies that the employee has authority to make an independent choice, free from immediate direction or supervision. Factors to consider include, but are not limited to: whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices; whether the employee carries out major assignments in conducting the operations of the business; whether the employee performs work that affects business operations to a substantial degree; whether the employee has authority to commit the employer in matters that have significant financial impact; whether the employee has authority to waive or deviate from established policies and procedures without prior approval, and other factors set forth in the regulation. The fact that an employee’s decisions are revised or reversed after review does not mean that the employee is not exercising discretion and independent judgment. The exercise of discretion and independent judgment must be more than the use of skill in applying well-established techniques, procedures or specific standards described in manuals or other sources.

Field of Science or Learning: fields of science or learning include law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical and biological sciences, pharmacy and other occupations that have a recognized professional status and are distinguishable from the mechanical arts or skilled trades where the knowledge could be of a fairly advanced type, but is not in a field of science or learning.

Highly Compensated Employees: Highly compensated employees performing office or non-manual work and paid total annual compensation of $100,000 or more (which must include at least $455 per week paid on a salary or fee basis) are exempt from the FLSA [Fair Labor Standards Act] if they customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee identified in the standard tests for exemption.

Invention, Imagination, Originality or Talent: distinguishes the creative professions from work that primarily depends on intelligence, diligence and accuracy. Exemption as a creative professional depends on the extent of the invention, imagination, originality or talent exercised by the employee. Whether the exemption applies, therefore, must be determined on a case-by-case basis. The requirements are generally met by actors, musicians, composers, soloists, certain painters, writers, cartoonists, essayists, novelists, and others as set forth in the regulations. Journalists may satisfy the duties requirements for the creative professional exemption if their primary duty is work requiring invention, imagination, originality or talent. Journalists are not exempt creative professionals if they only collect, organize and record information that is routine or already public, or if they do not contribute a unique interpretation or analysis to a news product.

Management: includes, but is not limited to, activities such as interviewing, selecting, and training of employees; setting and adjusting rates of pay and hours of work; directing the work of employees; maintaining records for use in supervision or control; appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; planning and controlling the budget; and monitoring or implementing legal compliance measures.

Matters of Significance: the level of importance or consequence of the work performed. An employee does not exercise discretion and independent judgment with respect to matters of significance merely because the employer will experience financial losses if the employee fails to perform the job properly. Similarly, an employee who operates very expensive equipment does not exercise discretion and independent judgment with respect to matters of significance merely because improper performance of the employee’s duties may cause serious financial loss to the employer.

Particular Weight: includes, but is not limited to, whether it is part of the employee’s job duties to make such recommendations, and the frequency with which such recommendations are made, requested, and relied upon. Generally, an executive’s recommendations must pertain to employees whom the executive customarily and regularly directs. It does not include occasional suggestions. An employee’s recommendations may still be deemed to have “particular weight” even if a higher level manager’s recommendation has more importance and even if the employee does not have authority to make the ultimate decision as to the employee’s change in status.

Practice of Law or Medicine: holding a valid license or certificate permitting the practice of law or medicine is exempt if the employee is actually engaged in such a practice. An employee who holds the requisite academic degree for the general practice of medicine is also exempt if he or she is engaged in an internship or resident program for the profession. The salary and salary basis requirements do not apply to bona fide practitioners of law or medicine.

Primary Duty: the principal, main, major or most important duty that the employee performs.

Recognized Field of Artistic or Creative Endeavor: includes such fields as, for example, music, writing, acting and the graphic arts.

Teachers: Teachers are exempt if their primary duty is teaching, tutoring, instructing or lecturing in the activity of imparting knowledge, and if they are employed and engaged in this activity as a teacher in an educational establishment. Exempt teachers include, but are not limited to, regular academic teachers; kindergarten or nursery school teachers; teachers of gifted or disabled children; teachers of skilled and semi-skilled trades and occupations; teachers engaged in automobile driving instruction; aircraft flight instructors; home economics teachers; and vocal or instrument music teachers. The salary and salary basis requirements do not apply to bona fide teachers. Having a primary duty of teaching, tutoring, instructing or lecturing in the activity of imparting knowledge includes, by its very nature, exercising discretion and judgment.

Two or More: two full-time non-student employees or their equivalent. For example, one full-time and two half-time non-student employees are equivalent to two full-time employees.

Work Hours: The FLSA [Fair Labor Standards Act] requires that covered, non-exempt employees be compensated (overtime pay / comp time) not less than time and one-half the employee's regular rate for time worked over 40 hours in a work week.

Work Requiring Advanced Knowledge: work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment. Professional work is therefore distinguished from work involving routine mental, manual, mechanical or physical work. A professional employee generally uses the advanced knowledge to analyze, interpret or make deductions from varying facts or circumstances. Advanced knowledge cannot be attained at the high school level.

 

If you have questions or concerns, please contact compensation@utdallas.edu.